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Harvard Management Co. Spinning Out Real Estate Investment to Bain Capital


Harvard Management Co. Spinning Out Real Estate Investment to Bain Capital

Asset Manager Expanding Real Estate Expertise with Addition of Harvard Management’s 20 Professionals

Bain Capital, a Boston-based multi-asset alternative investment firms, has formed Bain Capital Real Estate that will be comprised of the professionals currently managing Harvard Management Co.’s (HMC) real estate investments.

Harvard Management, which manages Harvard’s $37.1 billion endowment, has been considering spinning off its real estate team since the start of the year.

Effective Feb. 1, 2018, the Harvard Management real estate team, which consists of approximately 20 professionals, will spin out of HMC and become Bain Capital employees.

Dan Cummings, an industry veteran and currently managing director and head of real estate at HMC, will lead the team that he helped found in 2010. Cummings joined HMC in June 2009 as managing director and head of real estate, responsible for the strategy and performance of HMC’s real estate portfolio. Prior to joining HMC, Cummings was a managing director with The Carlyle Group. Before that, from 1979 until 2000, Cummings was with LaSalle Investment Management where he was Co-CEO/CIO and a board member of parent company, Jones Lang LaSalle.

The team, which has invested more than $3.4 billion of equity in its direct real estate investment strategy since its inception, will manage Harvard’s direct real estate investment portfolio and Harvard Management will continue to invest in Bain’s future strategies.

“We believe this builds upon our existing experience, aligns with investment opportunities in several of our business units, and will be an attractive resource for our investment teams and limited partners,” said John Connaughton and Jonathan Lavine, co-managing partners of Bain Capital.

The addition of the real estate team will also enable Bain Capital to leverage the group’s existing experience. Bain Capital currently has real estate expertise through its Capital Credit’s global distressed and special situations portfolio and Bain Capital Private Equity’s consumer, hospitality and retail portfolio.

As part of Bain Capital, the real estate team will assist in expanding on its expertise in life sciences/health care, consumer/retail, and industrial in its current portfolio as well as other future investments.

“Joining Bain Capital is an ideal fit for our team. The firm has established itself as a leading investor across asset classes globally, and we could not be more excited to build a real estate business at Bain Capital,” said Cummings.

Harvard’s real estate portfolio has traditionally been one of its strongest asset classes. In the 2016 fiscal year, real estate assets comprised 14.5% endowment and garnered 13.8 percent returns. 2017 returns were not identified.

HMC did report, however, that the university executed sales in real estate, generating “significant liquidity for the endowment.” The university ended the fiscal year (June 30, 2017) with $5.38 billion in real estate assets down from $6.44 billion a year earlier.

Source: Harvard Management Co. Spinning Out Real Estate Investment to Bain Capital

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