The hunt for yield is driving global investors' interest in adding real estate to their portfolios and creating selling opportunities for holders of core property portfolios, said speakers at the Pension Real Estate Association's 24th Annual Institutional Investor Real Estate Conference at the Hyatt Regency Century Plaza in Los Angeles, Sept. 30 to Oct. 2.
Mark McGoldrick, co-founder and global chief investment officer of multistrategy investment firm Mount Kellett Capital Management LP, New York, said his firm, which has about $7 billion in real estate assets, is taking advantage of current demand for hotels, which firm executives view as vulnerable to crises worldwide. Mount Kellett owns a value-added portfolio of 160 hotels located around the world, he said.
“Hotels are the most vulnerable asset class,” he said. “We are selling hotels because we are concerned with the geopolitical issues that could take the sector down.”
Mr. McGoldrick said investors need to be defensive in getting assets off their books.
He spoke on a panel on “The Global Economy's Influence on Investment Performance,” that also featured Mitchell Julis, co-founder, co-chairman and co-CEO of hedge fund and real estate firm Canyon Partners LLC, Los Angeles, and Bruce Zimmerman, CEO and CIO of the University of Texas Investment Management Co, Austin. Martin Wolf, chief economics commentator for the Financial Times, moderated the panel.