A former co-head of opportunistic funds at RREEF in Europe and ex-partner at Perella Weinberg is building a pan-European real estate platform of his own
Daniel Rigny doesn’t like to do things in small ways. In July, the first deal he struck on behalf of the firm he founded last year, TwentyTwo Real Estate, weighed in at a portly €1 billion.
In an exclusive interview in the wake of that transaction, French-born Rigny, 43, has unveiled to PERE his plans to build TwentyTwo Real Estate into an integrated Western Europe real estate company providing investment management, asset management, property management and brokerage services. However, before revealing news of a corporate transaction to that end, the real estate dealmaker makes it plain how he always has harbored an ambition to run his own platform.
Rigny left Deutsche Bank’s RREEF Real Estate, where he was co-head of opportunistic funds in Europe, in 2007 in order to join Perella Weinberg Partners alongside Léon Bressler. He did so with the idea that he perhaps could lead investments in Europe. However, he said his evolving ambitions were better suited elsewhere, hence his decision to leave last year to start his own company.
The first step in building TwentyTwo Real Estate into a sizeable operation has been to acquire the Selec portfolio of 7,600 residential units let to French power company EDF. Secondly, PERE can reveal that the firm also has acquired a 40 percent stake in Financiere Scaprim. That Paris-based company, which employs some 140 people in 18 offices, manages around €6 billion of properties and sold roughly 10,000 residential units over the last 10 years, making it one of the busiest in the country.
Rigny described Financiere Scaprim as being “probably the best residential asset manager in France” – understandable perhaps as it was Rigny that originally set the company while at Deutsche Bank in order to help manage the EDF portfolio. He explained how Deutsche Bank’s RREEF acquired the Selec portfolio from EDF in 2000 and how French private equity firm LBO France acquired a 54 percent stake in 2006, when there were more than 10,000 assets.
The Selec deal turned out to be a good one for all involved. Indeed, EDF took on a well-structured master lease that afforded investors with stable income.
Last year, TwentyTwo Real Estate began negotiating with Deutsche Bank and LBO France to buy the Selec portfolio, as well as a stake in the newly independent management of Financiere Scaprim. Rigny’s new firm wound up with the portfolio and a 40 percent shareholding in the property management company.
To beef up various parts of the Financiere Scaprim business, some key hires have been made. For example, it has hired Philippe Couturier to become managing director in charge of asset management. He previously built up Constructa Group’s asset management arm from €200 million to €7.5 billion in assets under management within nine years.
However, Rigny said the investment in the Selec portfolio and Financiere Scaprim is only part of an “ambitious mission” to build TwentyTwo Real Estate – so named because 22 is a lucky number in his family – into an integrated pan-European real estate business, which eventually could be rolled out beyond France to the UK, Spain and Germany. Indeed, it already is looking to establish an operation in Spain, where it is keen to make hires.
Indeed, in a second key hire, Christophe Kuhbier, who spent five years with Rigny at Perella Weinberg, has joined as a director of TwentyTwo Real Estate. He will focus on building investment management services across Europe.
With TwentyTwo Real Estate being a new firm, the capital for the Selec deal was organized via a special purpose vehicle called Powerhouse France. It came from high-net-worth clients of France’s Massena Partners and funds advised by Farallon Capital Management, which is a San Francisco-based global investment manager that manages around $19 billion in discretionary equity capital.
Rigny noted that his firm is contemplating various ways to structure future acquisitions. “Sourcing the right type of capital for the right opportunity is essential,” he said. While future large transactions may be arranged on behalf of select clients on an ad hoc basis, much like the Selec deal, one option for medium-sized deals would be to launch country-specific funds or, alternatively, a pan-Europe discretionary fund.
“For certain opportunities, we’d like our pool of capital to be as permanent and flexible as possible,” said Rigny. “That is a challenging objective in itself.”
Ultimately, the ambition is to create and grow a Western European real estate business with an “integrated full-service model” that is run with a “small, nimble” management team. “We will grow it as long as the management team and I have an impact on every transaction and assignment that we undertake for clients,” Rigny said. He wouldn’t put a number on it, but he added: “It would be pretty big – we started with a pretty big transaction.”