One of the managing directors of Lehman Brothers’ European real estate finance business has quit to set up a £1bn fund.
Andrew Pettit this week quit the US bank to create the first dedicated property-oriented hedge fund in Europe.
A source close to Pettit explained the new fund “will be based on a series of his key strategic relationships.
His departure is amicable, and he expects to work together with Lehmans in the future”.
Pettit has secured backing from both institutional and high-net-worth investors, and the fund will have an initial capacity to take leveraged positions in up to £1bn worth of deals.
He has been with Lehmans since 1995, leading the bank’s involvement in some of the largest deals in the UK.
Pettit was behind the UK’s largest-ever single asset sale – the £327m sale of Shell Mex House, WC1 – as well as the privatisation of Burford and last year’s £400m acquisition of Green Property’s UK portfolio for Burford 2, Tom Hunter’s West Coast Capital and Nick Leslau’s Prestbury.
And he has backed highly geared asset managers such as Catalyst, Thornfield and Stuart Loggie’s Cube Real Estate.
The source said the fund, which will operate out of the West End, would provide venture capital money and mezzanine debt “to build up business and exploit value-added opportunities in the UK and continental Europe.
Pettit will back smart operators – managers and investors with a track record for delivering value.”
The fund will also take “short and long positions in property company shares,” he added, “as well as exploring opportunities in undervalued property-rich companies.”
Lehman’s head of European real estate finance, Wilson Lee, said: “I would have loved him to stay, but you can’t shackle someone to their desk.
“I shall be reallocating his responsibilities, which has fired up the rest of his team.”
References: EGi News 19/01/04
