"Plenty to spare" ---> "Hunger Games"
Big shakeup in CBRE's investment management business.
Sign of a new cycle?
CBRE announced earlier today that CBRE IM would have two CEOs going forward, pulling in a highly respected LP from GIC as the primary investment decision-maker and elevating an existing leader as the ops chief.
Also, the firm's existing CIO (Kim Hourihan), who played a key role in the outperformance of CBRE's U.S. Core Partners Fund, will be 'pursuing opportunities outside the firm.'
Will the real estate investment management world look back at this as a marker for when leadership changes switched from push-oriented (i.e., 'you're fired') to pull-oriented (i.e., lured by better opportunities)?
With zero interest rates and falling cap rates, it's been relatively easy for investment managers to post wins over the last 20 years.
But a much more competitive environment is taking shape.
Fundraising over the last few cycles: "Plenty to spare"
-- Steady capital inflows
-- Everyone wins
-- Friendly (ish) competition
-- Room for small players
-- Very few big losses
-- Very few "star" portfolio managers
Fundraising in the new cycle: "Hunger Games"
-- Losses across the board
-- Capital outflows
-- Significant dispersion between winners and losers
-- Big get bigger
-- Legacy problems in every shop
-- Big compensation for proven investment managers
More to come on this over the next few days...
Ps - Any guesses where the outgoing CIO will land?
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