- October 1, 2009: Vol. 3, Number 10

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Be Reasonable

by Jonathan Hannam

"Boy, is it tough out there…” This was the response I received from a good friend who was trying to raise capital for an investment with one of the globe’s leading real estate developers. He had been doing the traditional capital-raising journey from Singapore to Abu Dhabi, then to Amsterdam and finally London. But, unlike in previous years, this trip was with little success.

For many investors, the past six months has been a period of “firefighting”. The various sovereign wealth funds (SWFs), pension funds and investment management groups are being forced to handle a vast array of issues. These include:

•      A number of GPs have gone bankrupt — especially in Japan;

•      In some cases, large LPs are refusing to fund capital calls;

•      Loan-to-value (LTV) covenants are being breached;

•      Debt is being renegotiated due to changes in asset LTVs;

•      Lower pro

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