Interview: Mr. Edward Casal, Chief Investment Officer, Global Real Estate Multi-Manager Group, Aviva Investors

Aviva Investors is a global asset management business and a wholly-owned subsidiary of Aviva plc, the world's fifth-largest insurance group and a world leader in financial services.
The company’s real estate team, based in New York, London, Paris, Frankfurt, Singapore and Melbourne is made up of over 170 people, of whom about 95 are investment professionals, including fund managers, asset managers, strategists, researchers and property finance experts.
It currently manage global real estate assets in excess of of $33 billion and already has extensive holdings in Europe as well as a growing presence in North America and the Asia-Pacific region. Of this, more than $6 billion has been invested through multi-manager strategies making it one of the largest global real estate multi-manager investors.
As noted by Mr. Edward Casal, Chief Investment Officer, Global Real Estate Multi-Manager Group, Aviva Investors, the company has been highly active over the past few years, expanding its range of funds and widening the client base.
“We have invested worldwide and on behalf of leading corporations, public pension funds, and other institutional clients, building one of the longest track records in the industry. We seek superior risk-adjusted returns for our clients by creating broadly diversified and actively managed private real estate portfolios,” he said.
Mr. Casal has spent over 20 years undertaking real estate transactions on behalf of institutional investors, industrial corporations and REITs while working at Goldman, Sachs & Co., Dillon, Read & Co, and UBS. In total, he has originated and executed in excess of $20 billion of real estate transactions including both entity-level and real estate property-level transactions. Immediately prior to joining Aviva Investors, he served as Chief Executive Officer of Madison Harbor Capital, a real estate multi-manager firm he co-founded in 2003.
He is a member of the Urban Land Institute, the International Council of Shopping Centers and the Pension Real Estate Association. He is also Chairman of Madison Harbor Balanced Strategies, Inc., an SEC-Registered real estate fund of funds.
Mr. Casal noted that his current team is one of the largest dedicated real estate multi-manager groups in the industry with investment professionals based in New York, London and Singapore.
“We provide local market expertise and manage relationships throughout Asia, Europe, and the Americas. Our global investment committee, comprised of members from each region, assures consistency in the approach and execution of our strategy.”
The real estate team is based in London, Paris, Singapore, Dublin, Frankfurt and New York. The global team is made up of 180 people, including 90 investment professionals, including fund managers, asset managers, strategists, researchers and property finance experts. Mr. Casal’s team is one of the largest dedicated real estate multi-manager groups in the industry with investment professionals based in New York, London and Singapore.
The group has a comprehensive range of products and services, offering real estate investors a unique combination of strengths: significant scale, impressive people, a comprehensive product range, excellent service and an outstanding reputation for innovation.
For institutional clients of scale, the group has created segregated portfolios by investing in a range of real estate ventures. These portfolios are customized reflecting the client’s individual objectives with respect to risk and return, geographic sector allocations and cash flow requirements.
“Aviva Investors has extensive capabilities with commingled investment vehicles. We seek to design portfolios with the core objective of consistently achieving superior risk-adjusted returns for our investors on a highly diversified basis,” he said.
Based on their view of the appropriate strategies for economic conditions, the group seeks to invest in newly-formed real estate ventures sponsored by managers with strong trace records that our experience and research suggest are best-suited to achieve our goals.
“Further, we seek to design a portfolio that ensures appropriate diversification with respect to geography, strategy, manager, property and asset type, capital structure, duration and asset lifecycle,” he said.
Aviva Investors is also a discreet and fast moving buyer of secondary interests in private equity real estate. The team looks at opportunities of all types and in all locations across Europe, the Americas and Asia.
Mr. Casal also noted that the private equity real estate secondary market offers opportunities to acquire specified assets that are well advanced in the investment program. A secondary transaction involves the purchase of one or more limited partnerships or similar interests from the original investor, providing that investor with liquidity.
Speaking on the main challenges, he said that while global growth is rebounding from the depths of the financial crisis, uncertainty regarding the medium-term direction of the global economy is significant, as the fiscal imbalances remain unresolved.
“We continue to structure investment portfolios with the underlying assumption that the developed economies will fluctuate as deleveraging pressures in both the private and government sectors create strong headwinds against relatively strong business financial
conditions. Therefore, relatively conservative investment strategies are warranted. The emerging markets have shown very strong recoveries, but we have to be cautious due to the risk of overheating.”
Accordingly, he said that real estate investing activity in the developed world should remain tilted toward defensive strategies rather than aggressive growth oriented objectives. Even within
emerging markets, growth expectations must be undertaken only with a rigorous value exercise in order to avoid disappointing investment results due to premium pricing driven by excessive
weight of capital overwhelming thin investment markets.
The real estate universe is vast and includes many assets with income-producing characteristics that reduce risk. Real estate investment should appeal strongly to investors during a prolonged period of uncertainty and risk-aversion, in particular because investment strategies can be devised to capitalize on many of real estate’s innate defensive qualities.
“Our investing strategy reflects this multi-speed view of the world, with a defensive bias. While in all markets value investing predominates, in the developed markets we continue to avoid development risk and strategies dependent on a robust consumer discretionary spending, and continue to participate in recapitalizations of real estate ownership vehicles.”
In the emerging world, growth strategies can be tolerated, particularly those that address continued urbanization and growth of middle class wealth. Nevertheless, it is imperative to remain cautious and vigilant regarding valuation bubbles in formation, he said.
Mr. Casal noted that Asia is a large opportunity for the company, having invested in the region for only 3 years now. This year, plans are to expand investments in Australia, Japan, Korea, China , Singapore, Hong Kong and India. The main client targets are cash rich- time poor investors.
“We provide local market expertise and manage relationships throughout Asia, Europe, and the Americas. Our global investment committee, comprised of members from each region, assures consistency in the approach and execution of our strategy,” he said.