JP Morgan Asset Management's global real assets business has created a new platform, Tactical Direct Investments (TDI), which will be a dedicated group focusing on cross-real assets opportunities. TDI will be focused on direct investments and co-investments across the risk-return spectrum and across the globe.
JP Morgan has been investing in real assets since 1970 and currently manages $82 billion in the space, including $17 billion in direct investments. Previously, institutions that wanted to invest with the real assets group would engage directly with the specialized teams within the business, including Americas real estate, European real estate, Asian real estate, global real estate securities, infrastructure, global maritime and real estate debt.
With TDI, however, investors that wanted to deploy capital across the real asset spectrum would now have a single, centralized point of contact. Direct investments could take one of three forms: as a co-investment alongside one of JP Morgan's commingled funds within real assets; as a separate account that would invest in a single asset; and as a separate account that would invest in a programmatic strategy, such as value-add office in Seoul.
“It helps to give them a sense of relative value among the different asset classes, and a more consistent client experience,” explained Doug Doughty, global head of business development and client strategy for the real assets group. TDI will be headed by Avik Mukhopadhyay, who joined the firm last July, and also include associate Arthur Zeckendorf.
“Institutional investors are increasingly seeking to complement their real asset fund holdings with direct investments,” said Joe Azelby, global head of real assets. “However, for both the investor and the investment manager, direct investing is fundamentally different from fund investing.”
Mukhopadhyay added: “By creating a dedicated team focused on providing bespoke investment solutions – be it co-investments, direct single asset transactions or thematic separately managed accounts – for clients across real estate, infrastructure and maritime/transports globally, we hope to be able to both deepen our relationships with existing clients and help new clients achieve their individual goals.”
However, for the past three or four years, the firm has offered investors advisory services on investing across sectors and geographies in real assets, either through commingled funds or on a direct basis, through its Omni program. Omni consists of “customized multi-sector and/or multi-geography real assets portfolios tailored to individual client objectives,” according to a JP Morgan presentation made to the City of Fresno Retirement Systems in November 2012. TDI, however, will be investment-driven rather than advisory-focused like Omni.
JP Morgan isn't the only company with a tactical direct investments team. New York-based private equity firm Fortress Investment Group also pursues such opportunities, both in public and private debt and public and private equity, within their Fortress Partners Funds series. Meanwhile, institutional investors such as the University of California Regents' alternatives investment team manages a dedicated $4 billion Cross Asset Class portfolio of strategic partnerships that invest in asset classes that include leveraged buyouts, venture capital, distressed debt, oil and gas, infrastructure, timberland, commodities, mining and royalties.
The firm's real assets team currently has approximately 400 professionals in the US, Europe and Asia. The team is part of JP Morgan Asset Management's alternatives investments business, which oversees more than $120 billion in assets across real assets, hedge funds, credit and private equity.
This article was first published on sister website PEREnews.com.