COL AH A partnership between COBA Asset Management and Langham Hall
Providing an innovative approach to distressed real estate funds
“The current environment requires new approaches. Lenders are dealing with problems in different ways from the last major recession. It is about finding ways to maximise the capital value and cash flow from assets as well as protecting the lender’s balance sheet. Failing funds present a particular challenge in this downturn. Resolving this challenge requires creativity and a broad range of specialist skills.”
Why has Colah been established? The unprecedented falls in value of property have put significant strains on fund managers. Many fund managersâ€™ fees are based on the net asset value of the assets - in some case net asset value is now zero after the value destruction cause by the credit crunch. Some fund management businesses are no longer viable. Many larger fund managers are reducing staff and do not have the capacity to manage smaller funds or the skills to manage underperforming funds. Investors in these funds are extremely vulnerable - the original management team may no longer be managing their funds or in some cases administrators or receivers may be managing the funds. We have established Colah to work with investors in, non executive directors of, and administrators and receivers to distressed property funds.
What does Colah do? Colah is a joint venture between COBA Asset Management and Langham Hall. Between us we have a range of skills to cover all aspects of fund management. Funds are usually operated by a regulated operator. The role of operator is especially important in times of distress where investors into funds should be relying on operators to provide oversight of the assets of the fund. Where necessary this should also include maintaining the fund administration aspect with a focus on investor reporting. Many of these funds are also domiciled offshore and it is critical from a tax substance perspective to ensure strong corporate governance and source the appropriate level of offshore fund administration. The assets that form the fund also need to be managed. Managing property assets can range from simply collecting rent, to having to deal with complex issues related to finance, tenants or development. Whilst tenants have a responsibility to seek permission from landlords to undertake certain actions, a landlord has a duty to be reasonable. Failure to properly manage the assets not only destroys value for investors it can lead to costly and unnecessary litigation. Colah can take over all aspects of managing a fund at short notice, stabilise the situation and develop a work out plan to protect all parties. In the medium term Colah can manage the fund, realise the assets or transfer the management of the fund to the most suitable asset manager.
We offer a unique proposition to a complex problem Taking over the management of an existing fund in distress is a complex problem. It not only requires a very broad range of skills - from accountancy to rent collection from difficult tenants - it requires the ability to move quickly and to transfer investors and properties to new management.
Why are we unique? We combine a range of essential skills, expertise and commercial acumen that cannot be found elsewhere.
Essential Skills ■ ■ ■ ■
Proven track record in fund management Understanding of the regulatory requirements Accountancy and reporting skills Administrative skills and systems to deal with investor accounts and also property accounts Asset management - particularly in addressing the needs of “neglected” properties Day to day property management Preparing properties in anticipation of a sale (physical and accounting/legal due diligence)
Highly qualified professional team – including accountancy, law, tax and surveying and professionals – principals each have at least twenty years relevant experience. Ability to design efficient operating and tax structures. Consultancy skills - the ability to define a project, break it down into actionable steps and the capacity to resolve problems Business planning to meet clear and measurable objectives. Selection of the best external suppliers such as letting agents and surveyors where necessary Managing the relationship with investors, banks and tenants
Commercial Acumen ■ ■ ■
We have profitable businesses which are owner managed We are experienced property fund managers We have a demonstrable track record of operating and administering property funds
Who we work with The majority of our work is directly with lenders but we also work with administrators, receivers and non-executive directors of regulated funds. With our unique set of skills we are able to help to structure and re-structure funds, identify ways to minimise the impact of losses on lenders balance sheets and find creative approaches to generating value.
Alignment of interests We recognise that our services are most likely to be needed when investors in funds are most disadvantaged. Whilst every situation is different, the principles we employ in agreeing the scope and terms of our work are: ■
Our fees will always be transparent and our interests will always be fully aligned with stakeholders Whilst we need to charge fees to cover our costs we are prepared to work on a basis whereby we share in the value that we create but are not rewarded for failure We will not seek to extend our involvement beyond the stage where we are adding value
The Team Colah is a partnership established by COBA Asset Management and Langham Hall. As separate organisations we have worked together for many years. We are able to offer a seamless service that combines the proven skills of both organisations.
COBA Asset Management COBA is an independent property fund manager, advisor and investor. COBA currently manages five property funds invested in all sectors in the UK and Europe, and has established close relationships with corporate bodies requiring property expertise. The property in the funds is actively managed and has significantly outperformed IPD particularly in the current difficult market conditions. In addition to their property expertise, COBA are experienced at managing relationships with investors and corporate partners.
Langham Hall Langham Hall is operator and administrator to 40 property and private equity real estate funds. It is a regulated operator in the UK and is regulated by both Jersey Financial Services Commission and Guernsey Financial Services Commission with additional offices in Luxembourg and Hong Kong. Langham Hall specialises in administering complex funds using online reporting systems and a range of back office consulting services provided to fund managers on behalf of investors. In 2009 they won the â€œSpecialist Professional Services Firm of the Yearâ€? category in the BVCA private equity awards. They also co-wrote the INREV reporting guidelines and sit on the INREV Reporting Committee.
For further information, contact Graham Gould at Coba Asset Management or Rob Short at Langham Hall:
COBA ASSET MANAGEMENT
43 Pall Mall, London SW1Y 5JG T +44 20 7930 1155 F +44 20 7930 1166 www.cobaassetmanagement.com
Amadeus House, 27B Floral Street, London WC2E 9DP T +44 20 7812 7050 F +44 20 7812 7079 www.langhamhall.com