Cobalt news

“Crossing Borders – Outward investment models”

Timothy Rowe

24/06/2010

As a real estate and infrastructure finance recruiter, clients and candidates often ask us; “is the market improving...?”.  As a sector specialist recruiter we are well placed to see what is happening across both sectors.  As a result we can offer a balanced view of the market to those working in it.    

Whilst we aren’t seeing the levels of activity we saw during 2007-  and we aren’t predicting these levels to return anytime soon - we are certainly seeing a marked improvement on 2009 levels. 

A good example of this is the investment funds.  Whilst a number of our clients were successful in raising new funds during 2008, 2009 proved to be a difficult time to close investments.  Last year saw the flow of credit diminish, which naturally resulted in an increase in the cost of financing.  This, coupled with a disparity in asset prices between buyers and sellers, made it difficult for our fund clients to close transactions.  In addition to these problems, fund managers looking to raise new equity found institutional investors reluctant to deploy their capital.  Flash forward to spring 2010 and the ‘green shoots’ that were being mentioned 12 months ago, really are starting to appear. 

A clear indication of this is the amount of new equity that is being raised across both real estate and infrastructure.

There are an increasing number of UK opportunistic funds being established and going forward, clients are looking to establish core European real estate funds.  This increase in European activity has been fuelled by the general feeling that the majority of the European real estate market has bottomed out, as result creating opportunities for investors.  As institutional investors are looking to place equity into real estate funds, we are seeing an increasing demand for experienced fundraisers, in addition to candidates with tax and legal real estate finance experience.

Whilst many thought Infrastructure fundraising during Q1 2010 would increase, everyone has been surprised by how much it has increased by. Globally, infrastructure fundraising for this quarter already exceeds more than half of the 2009 total.  If it continues at this rate, fundraising for the first half of 2010 will overtake the total for 2009.  This has had a positive impact on recruitment across infrastructure funds.  Where as last year we saw little recruitment across these funds, the increase in fundraising has meant more clients are looking to increase the size of their teams.  We have been seeing particular demand for candidates with power and utilities experience, in addition to European languages and transaction experience.