The new fund challenge: Though brand-name mega-funds are stockpiling huge war chests, the race to raise capital has never been harder for new funds
In 2005, Tom Shapiro left his job as senior managing director at Tishman Speyer, the white shoe real estate firm where he worked for nearly two decades, to strike out on his own. In less than a decade, Shapiro’s GTIS Partners, which specializes in opportunistic real estate investments, has grown its assets under management to some $3 billion and risen to become one of the largest real estate private equity companies in Brazil.
GTIS Partners was fortunate to cut its teeth before the global financial crisis struck. Since then, it has become much harder for so-called emerging investment managers (generally defined as firms with less than $2 billion in assets under management and three or fewer funds) to raise institutional capital, which is flowing more freely these days to large funds sponsored by brand-name managers.
“Today, it would be much more difficult for a new manager to raise capital than when we started GTIS,” says Shapiro, who was a member of Tishman Spey