Highbridge and Related Team Up for $800 Mln Joint Venture

Highbridge Principal Strategies and Related Companies said on Wednesday that they have teamed up to launch a joint venture. Both companies will invest $800 million in real estate projects in transition across the United States. Highbridge is a global credit and private investment firm; Related is a real estate development and investment firm.

PRESS RELEASE

NEW YORK–(BUSINESS WIRE)–June 26, 2013–
Related Companies (“Related”), one of the nation’s most prolific real estate development and investment firms, and Highbridge Principal Strategies (“HPS”), a global credit and private investment firm, today announced the formation of a joint venture that will manage a new real estate credit investment platform. Related, along with funds they control, and HPS will invest $800 million in available capital primarily in real estate debt, specifically gap financing for real estate projects in transition across the United States.
Brian Sedrish, an experienced real estate investment professional, will join the joint venture as a Managing Director and serve as portfolio manager for the platform, which will evaluate opportunities to invest in first lien mortgages, mezzanine loans, and preferred equity positions in both land deals and non-stabilized assets, focusing on transitional real estate investments, such as re-development, conversions and new construction.
“We are pleased to partner with Related, one of the most successful developers, owners and operators of real estate assets in the U.S., and to welcome Brian to the team,” said Alex Popov, Managing Director at HPS. “This joint venture will combine our due diligence and established credit structuring capabilities with Related’s 40 year track record in sourcing, developing, and managing real estate assets, to take advantage of attractive investment opportunities created by significant financing gaps in the residential and commercial real estate market.”
The joint venture will source investment opportunities across the nation with a focus on gateway cities including New York, Boston, Chicago, Washington D.C., Los Angeles, San Francisco and Miami and select secondary markets that demonstrate strong supply/demand imbalances.
“We look forward to partnering with HPS and combining our extensive real estate experience and access to deal flow with their extensive mezzanine credit experience to invest in financing opportunities secured by all property types throughout the country,” said Justin Metz, Managing Principal of Related Fund Management, the fund management platform of Related. “Together with HPS, we have identified an opportunity to capitalize on the demand for financing solutions and recapitalizations in the current market, and to make debt investments secured by non-income producing assets, which are not eligible for securitization.”
Brian Sedrish said, “I am delighted to join this joint venture and to lead this investment platform. Related and HPS have identified an opportunity that offers investors the ability to take advantage of attractive supply and demand dynamics in the residential and commercial markets while minimizing potential downside by engaging a world-class real estate developer and operator.”
Brian Sedrish was previously Head of Acquisitions for the Commercial Real Estate Division (Special Situations) at Deutsche Bank, where he was responsible for the purchase of distressed debt, the acquisition of non-performing and sub-performing pools of mortgages and the origination of high yield loans across the United States. Prior to joining Deutsche Bank, Mr. Sedrish was employed by Fortress Investment Group’s Drawbridge Special Opportunities Fund, where he focused on originating and purchasing high yield loans in the real estate sector and opportunistically acquiring real estate related assets across all sectors and geographic regions. He also previously held positions with Goldman Sachs and Lazard Frères & Co. Mr. Sedrish received a MPA from Harvard University, an MBA from the Kellogg Graduate School of Management, and a BA from the University of Michigan.
For more information on Related, please visit www.Related.com.
About Highbridge Principal Strategies
Highbridge Principal Strategies is a global credit and private investment firm with approximately $16 billion of assets under management. HPS invests across the capital structure in the public and private capital markets. HPS’ diversified investment platform includes privately negotiated mezzanine debt investments, specialty direct lending, public credit securities, growth equity and leveraged loans. HPS is a subsidiary of Highbridge Capital Management and J.P. Morgan Asset Management.
About Related Companies
Related Companies is one of the most prominent privately-owned real estate firms in the United States. Formed over 40 years ago, Related is a fully-integrated, highly diversified industry leader with experience in virtually every aspect of development, acquisitions, management, finance, marketing and sales. Headquartered in New York City, Related has offices and major developments in Boston, Chicago, Los Angeles, San Francisco, South Florida, Abu Dhabi, Sao Paulo and Shanghai and boasts a team of approximately 2,000 professionals. The Company’s existing portfolio of real estate assets, valued at over $15 billion, is made up of best-in-class mixed-use, residential, retail, office and affordable properties in premier high-barrier-to-entry markets. Related has developed preeminent mixed-use projects such as Time Warner Center in New York and CityPlace in West Palm Beach and is currently developing the 26-acre Hudson Yards project on Manhattan’s west side.
Related Fund Management is a Registered Investment Adviser staffed by seasoned professionals and currently manages approximately $3 billion of capital on behalf of sovereign wealth funds, pension plans, multi-managers, endowments and family offices across three areas: distressed real estate opportunities, origination and acquisition of debt, and multi-family housing opportunities.