Commonfund, the money manager for endowments and foundations, is stopping direct real estate investments as it seeks to restructure a $1 billion fund that lost most of its value.
Timothy Shine, who joined the firm as managing director in 2000 and ran the real estate group, left effective Oct. 31, according to letter to clients. The unit’s Commonfund Realty Investors fund is working with lenders to restructure its debt.
Mr. Shine’s unit had bought assets such as San Francisco office buildings, the St. Regis hotel project in Dallas, and California vineyards, using debt to help finance the deals. Commonfund wrote down the fund’s holdings to close to zero as capital markets tumbled in the aftermath of Lehman Brothers Holdings’ 2008 collapse, said two people briefed on the results.
The property unit is “actively working with the fund’s lenders with the goal to recover as much investor capital as possible,” Verne Sedlacek, CEO of Commonfund, said in the letter, a copy of which was obtained by Bloomberg News.
Mr. Shine is the latest executive to leave Commonfund, which manages $25.5 billion for non-profits. Hugh Scott, co-head of the real estate fund, left in January. Separately, Lyn Hutton resigned as chief investment officer in October after seven years in the job and almost three decades at the firm. In 2008, Commonfund restricted withdrawals from $10 billion of cash management funds when clients were being squeezed by the financial crisis.
Keith Luke, a spokesman for Commonfund, said Ms. Hutton’s departure wasn’t related to the real estate losses. The firm doesn’t have a deadline for the fund’s restructuring, which may include sales of “selective” properties, Mr. Luke said.
Mr. Shine didn’t return calls seeking comment.
Commonfund will continue to invest in real estate through its “more traditional fund-of-funds approach,” Mr. Sedlacek said in the investor letter.
