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Three of the world's most accomplished real estate bankers - John Carrafiell, Sonny Kalsi and Fred Schmidt - have launched an investment and advisory firm as the pace of restructuring in the property sector accelerates.
The trio of ex-Morgan Stanley veterans has set up GreenOak Real Estate ahead of an expected surge in distressed loan disposals, asset firesales and mortgage-backed security workouts in its main target markets of Europe, Japan and the United States.
GreenOak has secured US$110 million of seed capital, comprising a US$10 million working capital loan and a US$100 million co-investment commitment from Amsterdam-listed investment company Tetragon Financial Group, the closed-ended investor said in a statement on Monday.
Tetragon's investment will fund a limited fixed percentage amount of any GreenOak investment deal and will take a 10 per cent equity stake in GreenOak under the terms of the arrangement.
Entities linked to Tetragon, including Polygon Management, were considering additional infusions of capital into GreenOak in the future, Tetragon said.
"We think there are significant opportunities in the real estate market, including widespread distressed opportunities, and gaining further exposure to this asset class especially at attractive fee levels is very appealing," Paddy Dear, a director of TFG and principal of Polygon Credit Management, TFG's investment manager, said.
GreenOak was initially likely to focus on securing advisory mandates in complex property restructuring cases across Europe and make an immediate play for distressed physical real estate and mortgage buys in Japan as a principal investor, people in the market said. It will pursue both strategies in the US from the outset.
Carrafiell stepped down as joint global head of Morgan Stanley's real estate group in December 2008, setting up his own advisory firm, Alpha Real Estate Advisors. Kalsi, who replaced Carrafiell, and Schmidt, who headed the bank's Japanese property operations, left the bank in October 2009 and February 2010, respectively.

This article can be found on South China Morning Post, Wednesday, August 4, 2010

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