Deal Maker of the Year Awards 2012 WINNER - QATAR
DEAL: The First Investor announces First Closing of the TFI-Hines Brazil Income Real Estate Fund
NAME: David Clarke COMPANY: The First Investor (TFI) POSITION: CEO TEL: +974 66200551 EMAIL:
dclarke@tfi.com.qa WEBSITE:
www.tfi.com.qa
BIO:
David Clarke joined The First Investor (‘TFI’) in early 2009 and was appointed CEO later that year. TFI is a full service investment banking firm in Qatar regulated by the Qatar Central Bank. It offers investment management, real estate and investment banking services including merchant banking and private equity investments in a range of industries in the Middle East and internationally. Under Mr Clarke’s management, TFI has launched a series of real estate funds aimed at markets outside the GCC. The completed funds include a $650m US Real Estate fund; the first closing of the $500m TFI-Hines Brazil Income Real Estate Fund
Over the past 25 years, Mr Clarke has played a part in many significant acquisitions, investments, equity and debt offerings. Immediately prior to his appointment at TFI, David was Group Chief Financial Officer of Batelco, the incumbent publicly quoted $2bn market capitalized telecom operator in Bahrain with investments throughout the Middle East. He joined Batelco from Arab Banking Corporation in Bahrain where he was a Managing Director and Head of Corporate Finance. Previously at Deutsche Bank, David was a Managing Director in the Global Corporate Finance Group and Co-Head of Telecoms Investment Banking in Asia Pacific, based in Tokyo.
In addition to an investment banking career, David also spent time in senior corporate development roles in industry at Fujitsu Services and British Telecom (“BT”). During his time at BT, David was Head of Corporate Development for the Asia Pacific region based out of Singapore. He was responsible for strategy and mergers & acquisitions in Asia Pacific with a remit that encompassed the entire region. David spearheaded BT’s investments of over $2.5bn in fixed and mobile companies in India, Singapore, Malaysia, Hong Kong and South Korea. At BT David represented them as a non-executive on the boards of companies in Singapore (StarHub), India (Bharti Cellular) and New Zealand (Clear Communications).
Mr Clarke is an honours graduate of Warwick University, Cambridge University and the Manchester Business School. On his MBA course he was a Scholarship Student, graduated with Distinction and was awarded the prize for the highest grade in Corporate Finance. In addition, Mr Clarke represents TFI as a Director on several of its funds and direct investment company Boards.
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DEAL OVERVIEW: Q
Please summarize the transaction
In July 2012, TFI Hines Brazil Income Real Estate Fund (“The Fund”) successfully completed acquisition of first seed investment, The World Trade Centre (WTC) Complex in São Paulo, Brazil. WTC is a premium mixed-use development located in the central business district of Sao Paulo. The Complex comprises of an Office tower, the Sheraton Hotel, an upscale shopping centre and the largest convention centre in Brazil.
Q What was your role within the transaction
TFI is the Co-Fund Manager along with Hines. TFI played a key role in transaction starting from screening and identifying WTC as a potential investment opportunity, asset due diligence, structuring the transaction, liaison with third party service providers, leading negotiations with the seller and managing successful closure of the transaction.
Q
What were the challenges or difficulties presented
TFI encountered many challenges in the transaction including complex asset ownership structure, dealing with multiple stakeholders, complex Brazilian regulations, and adherence to principles of Shari’ah. In addition, the currency exchange rate between Brazilian Real and US Dollars experienced higher than expected volatility, which added a further layer of complexity.
Q
How were the challenges or difficulties overcome
TFI engaged several rounds of discussions with legal advisors and various stakeholders to simply the transaction structure. During the transaction span, TFI carefully monitored critical aspects so that the investment complies with the guidelines of the board. Furthermore, as the transaction closure took several months
given the complexities involved, TFI reached an agreement with the seller to lock in a fixed currency exchange rate to protect investors from currency volatility.
Q
How does the transaction fit in with your overall business strategy
The WTC Complex possesses an extremely diversified and high-quality revenue stream which has huge upside potential due to the synergies amongst the different business components of the complex. The asset will provide an attractive, long term income stream to investor which is highly valued by investors in current economic scenario.
Q
What are your plans following the transaction
The Fund has a strong pipeline of attractive investment opportunities for which preliminary due diligence is in progress. The Fund is currently focusing on industrial and logistics assets offering excellent rents and occupancy fundamentals over the medium and long term. Logistics assets are witnessing a huge surge due to growing domestic consumption.
Q
What are your thoughts and predictions within your sector for 2013 and beyond
Brazil is set on a high growth path due to strong domestic fundamentals and is expected to witness strong economic growth in 2013. The government and regulatory authorities have been pivotal in encouraging business sentiments, which has helped to insulate Brazil from global economic turmoil to a reasonable extent. With Brazil set to host the 2014 Football World Cup and 2016 Olympics, these events will further enhance the economics of the country.
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