Hodes Weill & Associates, a New York-based firm best known for its advisory and capital raising services, has formed a new company alongside a group of former Credit Suisse executives that can invest in timber and agriculture from a planned $500 million initial capital pool.
Tunbridge Partners, which will invest in market real estate and real asset managers globally, has held a first close towards its anticipated $500 million initial capitalisation of the company. The venture plans to acquire minority stakes in real asset fund managers that have assets under management of $1 billion to $10 billion, and generally have been in operation for at least five years. The managers predominantly will be in real estate, but also could include other real assets such as infrastructure, timber and agriculture.
The initial $500 million in capital is expected to be invested in 10 to 12 managers over the next few years.
“This is the first time we’ll have capital for this strategy,” said Douglas Weill, managing partner at Hodes Weill. “For Hodes Weill, it’s a significant step. We are very optimistic about growing this strategy out.”
The venture marks a significant move by Hodes Weill into principal investing and recognises investor demand for real estate and real assets globally. The group previously established a joint venture with an institutional partner to do recapitalisations of troubled real estate funds and partnerships, and also has invested in some of its clients’ deals over years. Managers that are backed by Tunbridge have the option, but are not required, to use Hodes Weill for institutional coverage and capital raising.
Tunbridge has already received support from a consortium of investors led by Pine Brook, a New York-based private equity firm that invests in energy and financial services businesses, and Quantum Strategic Partners, a private investment fund managed by Soros Fund Management. A final close is expected over the next several weeks and will include US-based public and corporate pension plans. The investor commitments range from $50 million to more than $150 million each.
The new company will be run on a day-to-day basis by chairman Brian Finn, a former chairman and chief executive of Asset Management Finance (AMF), an affiliate of Swiss investment bank Credit Suisse. He is joined by portfolio manager Sean Gallary, most recently a managing director at Orix USA, and previously a senior member of AMF’s investment team.