Assisting american equity investor in Europe
The real estate crisis introduced a new dimension to institutional/private sector relations. Private actors could no longer enjoy the same legal or professional certainty when it came to their institutional expectations. Alber & Geiger had to support its clients at a time when mutual distrust permeated capital and real estate markets.
Global Hospitality Investments
Global Hospitality Investments (GHI) is a large US real estate private equity investor. It acquired two Mexican properties in 2007 with a US$ 300 million loan from the former Hypo Real Estate Group (HRE). The properties comprised the legendary Fairmont Acapulco Princess hotel, a Mexican landmark project. In 2010, HRE’s portfolio was transferred to FMS Wertmanagement (FMS), the Federal government’s winding up institution for the HRE. GHI offered to buy back the loan from FMS to save the property investments and proceed with the development plans. FMS was not willing to deal with GHI, which made any solution almost impossible. GHI sought Alber & Geiger’s help with the ensuing impasse to find a deal.
Relying on financial instruments to make the case for our client
Craft a clear and concise message for the German government and Bundestag that highlighted the bureaucratic approach of FMS regarding the offer put forward by GHI. The behaviour of FMS did not respect good governance principles and ignored the purpose upon which it was created, namely to „unwind the portfolio whenever it is financially advantageous and thus to achieve the best possible outcome in the interest of the German taxpayer.“ The strategy made use of circumstantial empathy and situational awareness. It understood how the notions of reasonableness and fairness were manifested in the German public sector context. It demonstrated to the German Finance Ministry and Bundestag that the circumstances demanded an equitable treatment of GHI. It drew on a technical understanding of financial instruments in Germany that was used organically and by professional default to highlight the strength of the GHI proposal.
Proposal accepted and deal closed
Through our office in Berlin it was possible to work productively with the national playmakers and come to a solution. Alber & Geiger helped GHI prepare the offer and guided them thru the entire process while ensuring the political backing of the German Finance Ministry and Bundestag for a deal with FMS Wertmanagement, ensuring also that the Mexican government officially supports our proposal. The transaction was finally completed in March 2015. The President and CEO of GHI referred to as Alber & Geiger’s“Sophisticated EU advice.“