Seeing "real opportunity" in Spain's battered property and financial services sector, KKR...

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Cash Flow is King Comments (11)
 
It will be a long, slow, crawl out of Spain's real estate primordial morass. But when your business model is to extract and lock-up OPM (other people's money) it is an appealing sound bite ("battered" intimating quick flip, high return, etc.) that just may make the uninformed, undisciplined investor write checks and lock up money in a 7 or 10 year lock-up fund notwithstanding the fact that the "opportunity" is by definition short term in nature (i.e., market dislocation consisting of an oversupply of real estate product, and disparate one-off portfolio sales of real estate and corporate credit because of bank capitalization issues).

The question is do the mega private equity firms have the requisite boots on the ground local competitive informational advantage to take advantage of the opportunities in Spain (or Greece or Italy)....the fact is this appears to be significant "mission creep" and/or change in the purported core mandates for the mega private equity firms that have their core competencies rooted in corporate LBOs (albeit BX's real estate group can likely successfully execute on this opportunity, but they won't use a private equity fund rather their real estate funds). But as it relates to the other mega private equity business models ... caveat emptor.




25 Oct 2012, 10:47 AM Reply Like

Mike Maher Comments (1749)
 
I'd be more concerned with the Euro remaining where it is vs the dollar over the next decade, rather than trying to pick a bottom in Spanish real estate. The article says they are looking at financial services as well, which seems high risk, but potentially high reward.
25 Oct 2012, 11:42 AM Reply Like

Daveintosa Comments (113)
 
Economist Hook into Pescanova! GO PACK GO!!!!
25 Oct 2012, 12:32 PM Reply Like