Wealth management

Hong Kong-backed wealth manager LJ Partnership eyes expansion after pulling Gulf investment

With new Gulf shareholder Dilmun, the London-based multi-family office targets to grow Asia-Pacific assets under management to US$10 billion by 2021

PUBLISHED : Monday, 06 August, 2018, 7:01pm
UPDATED : Monday, 06 August, 2018, 10:50pm

LJ Partnership, a real-estate focused multi-family office backed by Hong Kong’s Peterson Group, plans to expand into Australia and Singapore as it seeks to build itself into a global wealth management platform channelling the growing pool of Asian families’ capital into cross-border projects.

Partner and co-chairman Andrew Williams said LJ Partnership is looking to grow its Asian assets under management to US$10 billion by 2021, from US$1.5 billion today, after a Gulf investor – the New York-based family office Dilmun – last month took a 40 per cent stake in the London-based wealth manager.

LJ Partnership will also rebrand to Alvarium Investments in 2019.

Williams refused to divulge Dilmun’s investment. Currently, LJ Partnership manages overall assets of US$15 billion on behalf of family offices, foundations, charities and individuals across both real estate, and fixed income and equity securities.

“We want to reach the growth target for Asia-Pacific partly through opening new businesses in Australia and Singapore, and partly through acquisitions to build out our own in-house boutique investment capabilities that would include mergers and acquisitions, and subsequently private equity and technology,” said Williams.

Last month, Ken Costa, a former global head of M&A at UBS, joined LJ Partnership as partner and shareholder.

In his most recent role as chairman of Lazard International, Costa advised Egyptian billionaire Mohammed al-Fayed’s £1.5 billion (US$1.9 billion) sale of the Harrods department store to the Qatari royal family.

Based in London, Costa will now steer LJ Partnership’s boutique investment infrastructure, which will initially focus on Europe.

In expanding its global property investment portfolio, Williams, who is based in Auckland, said LJ Partnership has invested US$50 million in New Zealand since 2017.

In Australia, where it expects to be operational in 2019, Williams said LJ Partnership, plans to focus on senior secured financing to property developers, an area from which many banks have withdrawn in recent years because of regulatory reasons.

“The regulatory framework imposed on banks in Australia and New Zealand has left a large funding gap for lending outside those provided by the formal banking system. Borrowers now have to pay double-digit yield to senior lenders for loans, and we are happy to be in that space,” said Williams.

On average, Williams said LJ Partnership invests about US$500 million to US$1 billion in real estate per year across 20-plus transactions. LJ Partnership will often co-invest with other family offices or private equity investors.

For example, in March 2017, LJ Partnership bought Generator Hostels, which runs 14 hostels in cities including London, Amsterdam, Miami and Barcelona, through subsidiary Queensgate Investments for 450 million (US$520.4 million). Queensgate is a real estate private equity firm set up by LJ Partnership, the Peterson Group and Jason Kow.

In Singapore, LJ Partnership is obtaining regulatory approval to set up an office, which will become operational “in the next few months”. For now, the office will focus on new clients acquisition.

Tony Yeung, managing director of Peterson Group and a partner at LJ Partnership, said in China, Pradera, a fund manager in which LJ Partnership owns a stake, manages four retail properties in Chongqing, Shanghai, Qingdao and Xian through its joint venture with Macquarie Retail Real Estate Management.

Yeung said LJ Partnership was looking to also expand its presence in China, but he gave no concrete timeline.