CHICAGO--(BUSINESS WIRE)--Has Walton Street Capital gone out on a limb by departing from its two decade long history as a real estate equity manager? The private equity real estate manager launched fundraising early this year for its newest fund, the Walton Street Real Estate Debt Fund, which will pursue a core real estate debt strategy.
- Until very recently, Walton Street has been primarily an equity investor focused on acquiring opportunistic real estate, not a lender to third-party owners of core real estate.
- Despite Walton Street's focus on opportunistic equity, results in its core competency have suffered: none of Walton Street's funds raised since 2000 were ranked as first quartile as of September 2013.
- Management fees charged by Walton Street for its Debt Fund would be significantly higher than in peer funds. Why should LPs pay a premium for an inexperienced manager with a poor track record?
- Walton Street largely failed to deploy its prior debt fund — the Fund V Participating Debt Facility, which was targeted at restructuring debt among troubled Fund V properties.
- Many of the worst failures by Walton Street and JMB Realty stemmed from a failure to effectively manage deal-level debt, which led to hundreds of millions in investor losses.
UNITE HERE represents workers throughout the U.S. and Canada who work in the hotel, gaming, food service, manufacturing, textile, distribution, laundry, and airport industries. UNITE HERE affiliates hold over $4 billion in financial assets contained in jointly-trusteed pension plans. UNITE HERE represents thousands of public employees who are participants in the Chicago Municipal Employees Annuity and Benefit Fund (MEABF), a limited partner in Walton Street Real Estate Fund V.