At this stage, ‘how to raise equity during a pandemic’ is a question rather than a statement.
EG has launched a new real estate fund for domestic and global institutional investors that will address environmental and social challenges presented by existing office and industrial assets while seeking to outperform the market benchmark. It’s something that we have a depth of experience in, the right team, four existing assets and current investors ready to support the Fund as we grow the asset base when new investors commit to the strategy. The issue is, how do we effectively let investors know about this opportunity, and then undertake due diligence on the strategy and team, when it’s still not easy to travel to Sydney and the EG team has only partially returned to the office after a three-month Covid lockdown?
Our approach has been to have marketing documents finalised and an Information Memorandum prepared as usual. We have sent emails to our contacts letting them know about this new opportunity, and from this we have curated a list of investors keen to hear more about a fund that sets out to make a real impact in ESG investing. We have arrived at the point when we would normally hop on a plane and meet with investors to hear their investment strategies, constraints, timing, and investment size. With international travel still difficult to many countries and not possible to others, we have had to turn away from wearing out shoe leather to focussing on technology. Like so many of us, we have now become relatively competent at managing calls via Teams or Zoom, sharing the pitchbook on screen. Where investors want to look at documentation and other supporting research, we have provided access to an online data room and a pre-filled questionnaire, answering investors’ standard due diligence questions. We have also prepared a due diligence review of EG as a manager by one of the Big 4 consulting firms to provide further help.
All is proceeding well so far. In fact, we have had more initial interest in this fund than any we have previously launched. The technology is mostly working well, but I miss the in-person meetings. It’s hard to read the level of interest in a room when you can only see your own slides and a person that, more often than not, is also working on their kitchen table. If they are really interested and engaged, are they going to be able to get the support of their investment committee when they too are working from home, and a trip to Sydney is for many out of the question – at least in the short term?
Of course they will! The investment strategy is well-structured, and the time is right. EG is well-known, and many of the potential investors are friends of many years standing. Yes, it will be harder to generate engagement from investors that are less familiar with EG, but hopefully they will have trusted contacts in other investor groups that can act as referees for us. I look forward to travelling again and having proper connections in meetings over lunch and dinner, but I am confident that with the right strategy, team and assets – and a compelling market opportunity – we will achieve good levels of support. Let’s see if I’m right!