Goldman Sachs Unit Buys its First Stake in Real-Estate Management Industry
October 22 2018 - 11:02AM
Dow Jones News
By Peter Grant
A unit of Goldman Sachs Group Inc. that specializes in buying
stakes in alternative investment managers has made its first
purchase in a firm that's dedicated to real estate.
The unit, Petershill, acquired this month a minority stake in
Westbrook Partners, a 24-year-old firm with $11 billion of property
under management in the U.S., Europe and Japan, according to Paul
Kazilionis, Westbrook's chief executive. Mr. Kazilionis declined to
specify the size of the stake or sale price.
Westbrook is making the move to strengthen its balance sheet and
to create a new ownership structure of the firm that adds Goldman
Sachs and about a half-dozen senior Westbrook executives as equity
holders. The firm had previously been owned entirely by Mr.
Kazilionis, who has committed to remain as Westbrook's chief
executive for at least another 10 years as part of the deal.
Mr. Kazilionis, who was a senior executive in Morgan Stanley's
real-estate business before helping found Westbrook in 1994, said
the deal with Goldman also is appealing because his firm will be
able to avail itself of Goldman's resources.
"It's local information flow that drives our business in these
markets," he said.
Petershill, named after a building in London, is part of Goldman
Sachs' asset management division and has invested in more than 20
investment firms since it started in 2007.
Its deals include a stake two years ago in Littlejohn & Co.
LLC, which invests in middle-market companies, and an investment
earlier this year in Clearlake Capital Group LP, whose target
sectors include energy and software. Petershill also acquired a 15%
stake earlier this month in private-equity firm Harvest Partners,
which focuses partly on management buyouts and recapitalizations of
middle-market companies.
Westbrook, which is based in West Palm Beach, Fla., has about
115 employees. It also has offices in London, Paris, Munich, Tokyo
and five other U.S. cities.
In the years after the 2008 financial crisis, Westbrook was
known for buying stakes in hotels like the Four Seasons in Miami
and San Francisco and the Ritz-Carlton in Boston. Lately, the firm
has focused more on "center of the alley" property types like
office and rental apartment buildings, Mr. Kazilionis said.
Write to Peter Grant at peter.grant@wsj.com
(END) Dow Jones Newswires
October 22, 2018 10:47 ET (14:47 GMT)
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