Chris Powers is out. Fort Capital sells to S2.
Here’s what happened:
1. Burnout is real.
Powers crushed it during the last cycle. Then his CEO left to pursue AI. A lawsuit followed. Fundraising fatigue set in. Who can blame him?
2. AI > Real Estate?
He kept the IP. He’s been loud about automation in CRE, and now he’s going all in.
3. Institutional fundraising is a meat grinder.
He tried to pivot from HNW syndication to institutional capital. Even with a huge audience, raising a fund is brutal. And once you start, you never stop.
4. Get big or die.
LPs are consolidating. The middle is disappearing. It’s harder than ever for small managers to win big checks and top talent.
5. Follow the money.
Housing and industrial are still institutional darlings. S2 sees industrial as a path to capital, scale, and diversification.
6. S2 had a head start.
They already hired Chris Roach, CCIM (ex-BBG CEO) and Parker McCormack (former JLL broker) to build out their industrial platform. The Fort acquisition just accelerates it.
7. A bet on vertical integration.
Big platforms = allocator + double promote. Fort gives S2 operating capabilities, which could be a competitive advantage vs. bigger managers.
8. Industrial investment management scales better.
With higher interest rates and fewer sales, it's harder to carry the headcount intensity of multifamily management. But industrial is stickier and more scalable.
9. A quiet pivot.
S2 wasn't as overexposed as Tides, but they were an extremely active buyer around the peak. Floating-rate debt, maturity cliffs. Industrial could add ballast.
10. Creative dealmaking.
This deal reportedly came out of two GPs swapping war stories. It ended in a creative structure that gave both what they needed.
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The GP shakeout isn’t coming. It’s here.
...and it's creating challenges and opportunities.
If someone like Powers is willing to sell, who isn’t?
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