Macquarie Buying 49% Stake in Ochtar Capital

BERMUDA-Macquarie Property, the real estate division of Sydney-based Macquarie Bank Limited, is buying a 49% stake in locally based Ochtar Capital Partners Ltd., a company formed early this year for the management-led buyout of Lend Lease Corp.’s fund advisory business. According to the agreement, Ochtar is changing its name to Macquarie Global Property Advisors but will remain focused on private equity real estate investment in Europe and Asia. In February, Lend Lease Corp. Ltd. agreed to sell the advisory company that created its $1.6-billion, fully invested closed-end global property fund to the management team that created it. The seven managers left the company and created their own firm last October after Lend Lease decided it would not start new funds as originally planned. The fund is called Lend Lease Global Properties SICAF and the associated advisory company was called Lend Lease Global Real Estate Advisors SA. The sale to Ochtar included the advisory business, two other companies and certain assets relating to the business. In consideration of the transaction, when the fund is liquidated between 2006 and 2009, Ochtar will receive 25% and Lend Lease 75% of any incentive fees, which would be any profits received over a certain percentage return for the fund’s investors. According to the agreement, Lend Lease also was to provide a working capital loan to Ochtar, together with transitional services for a period of six months. That period ends this month.In February, the chairman and CEO of Ochtar Jim Quille told GlobeSt.com that the company’s plans were to take the platform and go do it again. “When we formed the fund it was to be one of a series of funds,” said Quille. “But when they decided they would not stay in the business, we as a team wanted to carry them on, and that’s what we intend to do, bring another product to the market, and we have a lot of support from our investors.” The current fund is 65% office and rounded out with residential, retail and industrial and its geographic exposure is 85% Europe and 25% Asia. Quille says the next fund, expected to be announced in the next couple of months, should be the same size and similarly focused on Europe and Asia, but with equal exposure between the two continents. “We are seeing a lot more opportunities in Asia at this moment,” said Quille in February.In a phone interview this week, Quille says the company’s plans have not changed and that the addition of a strategic partner like Macquarie to provide investment capital always was part of the plan. As well, Quille says part of the plan is to do separate account work for larger institutions “who put their toe in the water with funds but now are picking up their own strategies and doing direct investment.”Quille says the new partnership with Macquarie is a good fit because while Macquarie has been expanding its investment business internationally, it has been in property securities, infrastructure, REITs and investment banking, not in the equity space that Ochtar is working in.Macquarie Property chief Stephen Girdis says the new partnership also complements the existing Macquarie Capital Partners business, which raises capital in the US, European and Middle East markets. “Specifically, this joint venture will provide Macquarie’s Property Investment Banking business with a broad range of products to offer investors,” says Girdis, who will join the board of directors of the new company along with Matthew Banks, head of Macquarie Property Investment Banking.Ochtar has seven principals and 32 employees divided among offices in Hong Kong, London, Seoul, Tokyo and Luxembourg. As is typical of advisory companies, Quille says Ochtar is compensated for its fund management with a fee that is a percentage of the equity invested. In addition to Quille, who was previously chairman and CEO of Lend Lease Global Advisors, the senior executives of Ochtar include: Andrew Wood, COO, responsible for the day-to-day operations of the company and the European business; Alex Jeffrey, finance director, responsible for the management of all the financial and accounting functions; Digby Okell, responsible for investment management in Europe; Michael Wilkinson, responsible for investment management throughout the Asia region; Simon Treacy, responsible for all capital transactions and asset management activities in Japan; Brett Straatemeier, responsible for all corporate finance activities in Asia, and Moon Duck Kim, responsible for capital transactions activities in the Asia region.