The Changing Road

The word I've heard most this week is 'Change.'  It's not just change in the amount of capital (formerly known as The Wave of Capital) ready, willing and able to be invested by institutional investors nor just about the changes that investors are looking for in fund structures nor just about the control that investors are seeking nor just about the stronger interest in separate accounts, club deals and one-off transactions and of course the changes in fee structure that investors are clamoring for. It is about all these things but it's about more too: about how people get compensated, about the types of new advisory businesses that have been and are being launched, about the way deals get financed, about the jobs that disappeared and are slowly reappearing, about whether bigger is better. Mike Golubic of The Townsend Group wrote an excellent piece in the Spring, 2008 issue of PREA Quarterly. Here's an excerpt:

"The last five years (2003-2008) have seen the number of available funds double and the total assets under management more than quadruple. Over this same time period, investor appetite has continued to exceed the existing capacity, and as a result, investors have had to wait in lengthy contribution/deposit queues to get new money invested." Boy oh boy, how things have changed!

When I graduated high school, my parents gave me a graduation card. What I remember about it is that it had drawings of a path that my parents hoped I would follow: College. Career. Marriage. Home. Family. Country Club. Retirement. I don't think I bought into it then and in hindsight, while some of that path ended up the road I did follow (although a lot of it was 'Driving With My Knees') it reflects the values of their generation; a generation to whom owning a home represented the American dream. Well, as John Lennon said, "The dream is over." Americans are walking away from their homes by the thousands, simply mailing their keys back to their lender (if they even can figure out who the lender is). These are not all situations where the value of the house/condo is less than the mortgage on it. And it's not limited to people who can't afford to pay the mortgage. But the sad and somewhat scary thing about this is that, for those folks, their dream may be over for good. In the world of high finance, there is always news, always talk and as a result, some action. But as I talk with people around the country, we are in very, very bad shape and we seem to be spending our resources on things outside helping our own people. When history looks back on this period in American history. They may even title the chapter, "The American Dream Is Over." What a legacy!

The photo above was taken almost a year ago to the day.  It's of my father with The Jill, the airplane that he and a pilot brought cross-country in 1945.  It is a single-engine Japanese war plane.  I'd written here some time back about this experience and how much it meant to him.  I found the plane through the Smithsonian who had it sort of buried in one of their warehouses.  I only recently discovered this photo that was taken that snowy, icy and cold day but for my father, it gave him one of the warmest feelings of his life.



On the road....
2/9-11: Palos Verdes, CA to attend IREI's VIP Conference
2/17-19: Raleigh/Durham for meetings and to be a judge in the UNC Kenan-Flagler Real Estate Challenge
3/14-25: Boston to attend the PREA Spring Conference
4/12-14: Dallas to attend the UBS Annual Client Conference
4/19-20: New York to attend the ING Annual Client Conference
4/21-23: Venice to attend the Annual INREV Conference
4/26-30: London

Restaurant of the week: Inside Park at St. Barts (http://www.insideparknyc.com), 325 Park Avenue, New York. This space is a hidden gem, right on Park Avenue. It's got an eclectic menu and is pretty quiet so it's good for a business lunch. My salad was excellent. During the spring/summer/fall there's a great al fresco eating area which excellent for people watching.













These are my views and not that of my employer.