REPE Fund Profile Series - Part Six: AEW Global
Welcome to Part Six of our Fund Profile Series. We’re continuing our cross-examination of the top 50 global real estate private equity (REPE) firms, as per the 2020 PERE 100 list.
As you'll know by now if you’ve been following along, each REPE fund profile briefly summarizes each fund’s history, as well as getting into the details of how the firms carry out their real estate equity investments—we’re hoping to help you get up to speed for your upcoming real estate private equity interviews by the end of each post!
Now that we’ve looked at Lone Star Funds in Part Five of the series, we’re moving on to focus on AEW Global in more detail.
Key facts about AEW
AEW was founded in Boston in 1981 by Peter Aldrich, Tom Eastman, and Mark Waltch. The firm became one of the first U.S. REIT advisors in 1995, adding global REITs to its portfolio a decade later, in 2005.
Fueled by its domestic growth, the firm expanded into the European market in 1996 with the opening of its Paris office, then into the Asia-Pacific region in 2006 with its newly minted Singapore office.
Today, the firm has a team of over 770 people across 16 countries, with the bulk of its workforce (just under two thirds) located in Europe. AEW’s international office locations include Prague, Seoul, Düsseldorf, and Milan—but here in the U.S., there are only two hubs: its headquarters in Boston and Los Angeles.
As a business, the AEW Group is organised under two main umbrellas:
- AEW Capital Management, L.P. in North America (its wholly-owned subsidiaries being AEW Global Advisors (Europe) Ltd., AEW Asia Pte. Ltd. and AEW Asia Limited); and
- AEW SA in Europe (its subsidiaries being AEW Europe LLP, AEW S.à r.l., AEW SAS, AEW Invest GmbH, and AEW UK Investment Management LLP).
As an affiliate company of AEW Capital Management, the AEW SA part of the business is owned by two French financial services firms: Natixis Investment Managers and La Banque Postale.
What does AEW’s real estate investment strategy look like?
Looking at the business as a whole, the AEW Group had $88.6B worth of assets under management at the end of the second half of 2021. The firm uses a number of established investment strategies across its funds—namely Core, Core Plus & Value-Add, Opportunistic, and Real Estate Securities strategies—which are each broken down into smaller, distinct approaches, outlined below:
Core (67% of AEW’s portfolio)
Here, AEW focuses on investing in well-located assets of good quality, with the aim to maintain steady and stable income in the long-term. The firm splits this strategy into three sub-categories: core real estate, diversified REITs, and senior debt.
Core Plus & Value-Add (24% of AEW’s portfolio)
With this approach, the firm looks for high-growth opportunities—for example, the growing need for luxury retirement homes (see the Balfour Senior Living Portfolio deal in the section below). Within this strategy, AEW niche down into value-added real estate, focused REITs, and mezzanine debt, as well as senior housing.
Opportunistic (2% of AEW’s portfolio)
This strategy focuses on scoping out social and demographic trends to ‘get in early’ before the wider market. Within this approach, the firm separates this strategy into opportunistic real estate and long/short REITs.
Real Estate Securities (7% of AEW’s portfolio)
Within this strategy, the firm provides a variety of real estate investment securities packages to either diversify or focus a client’s holdings in a specific market. Here, AEW offers securities in either the North America, Europe, or Asia-Pacific markets, or globally.
AEW’s global real estate investment portfolio spans across all major asset classes including credit assets, REITs (both global and specific markets), retail developments, industrial and logistics assets, office properties, multifamily units, and hospitality and leisure properties, in addition to niche investments in other sectors such as senior retirement housing.
Some of AEW’s prominent deals
We always recommend that you take the time to examine a real estate private equity firm’s deals, looking at both challenges and successes, to get a better understanding of how and why they invest in the way that they do.
As a starting point, we’ve given you a few examples of AEW’s deals below:
Balfour Senior Living
TrustCapital
In 2017, AEW acquired a 106,000 square feet 15-storey office tower block from TrustCapital for AUD$165 million (around $124M) as part of a wider investment strategy. The building is located in a prime location in Sydney’s central business district and, at the time of purchase, had already received AUD$20M worth of investment for improvements.
As of February 2020, the firm was preparing to sell the office asset for AUD$250M (around $188M); however, it appears this plan may have been shelved due to the impact of the Coronavirus pandemic.
Waterline, Miami Riverwalk
In 2018, AEW partnered with Mast Capital to acquire Miami Riverwalk for $26M—an example of its opportunistic strategy. The acquisition included around 275,000 square feet of land (about the same size as Heroes' Square in Budapest, Hungary) for mixed-use development with unobstructed water frontage along the Miami River.
TA Realty
In 2019, AEW (along with Blackstone) acquired a logistics portfolio from TA Realty for a combined total of $1.04B. Although these were two separate transactions, there’s no breakdown for the separate components of the deal. The entire portfolio included 96 assets and 8.3 million square feet—of this, AEW’s share comprised 28 Texas-based assets.
Palm Capital
More recently in 2021, the firm acquired the Copenhagen Cargo Centre, an airside logistics asset at Copenhagen Airport, for EUR €80M (around $92.7M) from Palm Capital on behalf of a German pension fund. The asset includes around 285,000 square feet (approx. 6 and a half football fields) of warehouse space, offices, and parking spaces, already occupied by reputable corporate tenants like DHL and Worldwide Flight Services.
Over to you...
We hope you found this AEW Global REPE fund profile helpful for your upcoming real estate private equity interview preparations. Now that you’re up to speed: do you have the right strategy to sell yourself well at your interview?
Let us help you set yourself up for your new career in REPE: check out how we can support your career goals at Leveraged Breakdowns.
About the Author:
Melody Sadé Abeni is a London-based writer who specialises in commercial real estate content. As a generalist member of the Leveraged Breakdowns team, she crafts detailed posts geared towards those curious about the real estate private equity life.
In her former professional life, Melody supported senior corporate executives as a global mobility consultant and did her time in both management consulting and specialist asset management firms.
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