A Sydney real estate fund manager has established a private wealth division, as it sees opportunities to snap up new assets for syndicates of wealthy investors.
EG currently manages about $3.2 billion in property assets, for investors that are mostly pension funds and large institutions. It was founded 20 years ago by Michael Easson (current chair of ASFA), Shane Geha and Adam Geha. It is owned by their families.
Recent focus has been in the insto market but it's once again shifting focus to HNW investors.
"From 2006 onwards, [our funds] were backed by large instos and there has been a hiatus on finding opportunities for HNW families. But we are now finding assets at that $5 to $35 million price point that doesn't conflict with our institutional investors," said EG associate director Rodney Walt, who leads the private wealth division.
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Walt said for the family office channel, EG will specifically look for assets with long-term leases.
In January, it bought a $20 million industrial property on Sydney's Northern Beaches, on behalf of a 12-person syndicate. It's also looking at another similar sized asset and doing due diligence on another opportunity in Brisbane.
EG co-invests in the deals (via its balance sheet, not through the funds) and typical fee structures include an establishment fee (about 2%), funds management fees (about 0.5%) and performance fees on returns above a performance hurdle.
"It is an area we are looking to grow. Certainly, [I] think over the next three years we will have about half a billion in asset under management under the private wealth division."