Meet The New Leader At A Boutique Investor That Is Becoming A Rare Breed
Independent small and medium-sized private equity firms are becoming an increasingly rare breed in Europe.
The new managing partner of one such firm, Benson Elliot's Trish Barrigan, was speaking to Bisnow on the morning news emerged Tristan Capital had sold a stake in its business to a subsidiary of New York Life, joining a raft of other small and mid-sized fund managers that have sold out in recent months. That deal leaves her company as a bit of a unicorn.
Barrigan last year took over as managing partner of the private equity fund manager she co-founded in 2004 alongside Marc Mogull. With the wave of consolidations in real estate fund management and cost-cutting from the investors that back new funds, to survive and thrive you need to be pretty damn good at what you do. There will be few new firms coming through to replace those that have napped up by the bigger beasts, according to Barrigan.
“It is hard to raise a first-time fund,” she said. “Big institutional investors used to focus on having multiple manager relationships, so in terms of their performance they would revert to the mean somewhat. Now institutions are reducing their costs and chasing a smaller number of relationships with best-in-class managers, and so it's very hard to break into new relationships.”
So with peers like Tristan, Internos, Brockton, Resolution and Europa all having found new owners or partners in recent years, where does Barrigan see Benson Elliot fitting into the European private equity firmament?
“We’ve always positioned ourselves in the middle market,” Barrigan said. “We’ve told investors that we will always raise funds of less than €1B which we will invest across 15-20 transactions of various sizes. We think that allows us to find deals that will provide good growth, where there is less competition, rather than just competing in competitive auctions which drive up pricing.”
“We’re lucky to have a very supportive group of existing investors,” she said.
The strategy seems to be working. Benson Elliot raised €700M for its fourth fund in June 2016, when co-investment capital is taken into account, and in spite of the fact that it closed the fund the day before the Brexit vote, has been investing in deals in Poland, Italy, France and Germany. In the U.K., the firm is looking outside of London in areas capital values have still not rebounded toward their last peak.
“People think the financial crisis ended in 2009, and in the U.S. to some degree it did — if you’re investing in the U.S. you will be buying assets that have been bought and sold two or three times now. In Europe not a lot traded around 2009, then in 2011 you had the euro crisis. So the cycle in Europe didn’t really start until 2012. You can still buy good assets from banks or other investors that have been under-managed.”
She said that offices look a good bet, due to the relative undersupply caused by the financial crisis and the need to reposition existing buildings that are becoming obsolete and are held by owners that do not want to invest in them.
Barrigan stands out somewhat as a female managing partner in the male-dominated world of real estate private equity — well, real estate in general. So how does she differ from Mogull and Benson Elliot’s other senior partner, Joseph de Leo?
“We definitely have different investment styles,” she said. “Marc is definitely the most risk averse, and Joe is in the middle, so I guess that makes me the biggest risk taker. But we always think about things from the point of view of a fiduciary and a principal investor — our material net worth is invested in these funds.”
In terms of her best and worst deals, in the plus column Barrigan cited the recent sale of a 700-unit residential and mixed-use development in Berlin, where in the space of just over 18 months the company bought a site, secured planning consent, put in place a construction contract and exited.
“That really shows the DNA of Benson Elliot,” she said.
In the minus column, she is honest but optimistic about an office in Paris bought in 2007 which the company still owns.
“We bought it and demand dried up and financing dried up,” she said. “But we recently secured a building permit and we’re looking forward to building the right product for the market today. Never give up and never lose focus.”
Outside of work, Barrigan is the kind of sportsperson that makes you look at your own efforts to keep fit and cringe. A keen footballer, she played in goal for Boston College, her university team. She has turned out for Benson Elliot’s team in an inter-firm private equity real estate five-a-side tournament, although the company did not take home any silverware.
She trains six times a week with an eye on competing in the European Triathlon Championship in Ibiza in October. This is not the kind of event where you just pay £100 to enter — to qualify your time has to be within 15% of the people that win qualifying events.
“For my birthday my husband thought it was a good idea to enter us into a half Ironman event,” she said.
Barrigan is working hard to stay ahead of the competition in every way possible.