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New debt CIO for Blackstone

By Will Caiger-Smith
16 Jun 2015

Global property giant Blackstone has hired Deutsche Bank’s former global head of commercial real estate as the new chief investment officer for its real estate debt business.

Jonathan Pollack, who joins Blackstone as a senior managing director, was a managing director at Deutsche Bank, where in addition to his real estate role was head of risk for structured finance.

Blackstone has pioneered the nascent single-family rental ABS market in the United States of late, and launched the biggest deal yet in that asset class last week, through its Invitation Homes subsidiary. The firm manages nearly $10bn through its real estate investment platforms.

Its recent acquisition of mortgages from General Electric has “scaled that business even further”, said Mike Nash, head of Blackstone Real Estate Debt Strategies (BREDS), to whom Pollack will report.

Pollack is a Deutsche Bank veteran, having joined the firm in 1999 from Nomura. He co-founded Deutsche’s CRE capital markets team in London in 2001.

SFR strides

Within its real estate businesses, Blackstone has emerged as a leader in the single-family rental ABS market, where issuance has grown since Blackstone subsidiary Invitation Homes kicked it off in 2014.

Invitation Homes’ latest deal, which priced last week, was $1.144bn in size, a record for the asset class so far. Its $536 senior tranche was priced at 130bp over one month Libor.

But despite the success of recent transactions, market participants remain divided over the asset class, which equity research analysts told GlobalCapital has allowed real estate investment trust landlords to finance themselves at cheaper levels than they could in equity markets. Many view the equity of such companies as undervalued given property values.

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By Will Caiger-Smith
16 Jun 2015