Monday, February 16, 2009

Hard-Hit Sovereign Wealth Funds Avoid Further Bank Bailouts but Expect to Re-Enter Market by Year End

LONDON—There is good news, bad news and just fair news today on when the U.S. economy might begin to turn around – and it isn’t coming from 1600 Pennsylvania Avenue.

It’s coming from London-based Financial Dynamics International, a 27-year-old global financial and corporate communications consulting firm.

The good news: The world’s major Sovereign Wealth Funds are betting the downward price spiral of American companies’ stock values will bottom out by the end of this year.

The bad news: Values are expected to drop even further over the next six months.

The just-fair news: Ailing U.S. financial institutions may no longer be able to depend on a life jacket from SWFs.

FD has just completed personal interviews with senior executives from many of the world’s leading Sovereign Wealth Funds. Those funds account for over 50 percent of the U.S. $5 trillion worth of collective global funds held by the SWF asset class.

The FD data focused on current SWF attitudes towards valuations, investment strategies and where they see regional investment opportunities.
Here are the highlights:

SWFs are broadly adopting a very cautious approach to the current market, expecting better value to materialize later during the year.

SWFs are primarily interested in acquiring minority equity stakes in listed companies, with no desire to take management control, have board representation or act as “activist” investors.

SWFs are particularly cautious with regard to supporting further bailouts of distressed companies.

SWFs currently see the most attractive regions for investment being Brazil, China and areas of Central America.

Western European markets are also seen as offering the most compelling value with PE ratios of publicly listed companies down more than 40% from their peak, and markets trading at the lowest absolute price earnings ratios of under 10.0x.

SWF investment decisions on average are made on a minimum of a five year investment perspective, with dividend yield being as critical an investment criterion as capital growth.

In the short term, some SWFs are seeing their cash in-flows diverted from their global portfolios to invest in their home countries/regions to add stability and economic stimulus to local markets.

“Our research confirms that while Sovereign Wealth Funds are currently adopting a very cautious investment approach to world markets, they are clearly poised to re-enter the global equity markets in the not too distant future with compelling valuation propositions beginning to present themselves across North American and Western European equity markets,” notes FD Group CEO Charles Watson. (top right photo)
"Our research has also determined that contrary to widespread perceptions, Sovereign Wealth Funds are primarily genuine long term passive investors who have no agenda to exercize management control or behave in an activist way.”

Watson finds that “while a number of key SWF investments have been made over the last 18 months and SWFs are still interested in broadening their portfolios, the findings showed that this particular class of investor is keeping a watchful eye on global markets, waiting for the right time to make deep value investments.”

FD carried out the research to identify which markets still held the best value for investors. The findings showed that actually despite market conditions, Western Europe and North America were identified as the best investment regions in financial terms.

Declan Kelly (top left photo) and Oliver Pawle (middle right photo) are co-founders of Financial Dynamics International. Pawle is chairman and works out of the company’s London office. Kelly is CEO of the company’s U.S. and Ireland offices. Declan Kelly of Financial Dynamics is not related to Declan Kelly, Ireland’s Ambassador to Canada.

HFF announces $15M in closed Southeast U.S. shopping center sales

ATLANTA, GA, Feb. 16, 2009 – The Atlanta office of HFF (Holliday Fenoglio Fowler, L.P.) announced today it has closed more than $15 million in shopping center investment sale transactions in the Southeast United States on behalf of Centro Properties Group.

The two properties are: The Shoppes at Letson Farms (top right photo) in McCalla, Alabama and Hampton Plaza (top left photo) in Tampa, Florida.

HFF senior managing director Whitney Knoll, (middle right photo) managing director Brad Peterson (bottom left photo) and associate director Justin Greider marketed both properties on behalf of the seller.

DLC Management Corporation purchased The Shoppes at Letson Farms for $12.675 million in February 2009. Gator Investments purchased Hampton Plaza in November 2008 for $2.6 million.

The Shoppes at Letson Farms is situated on 15.8 acres at 4750 Eastern Valley Road in McCalla, near the junction of Interstates 459 and 20 in southwest Birmingham.

Completed between 2002 and 2004, the grocery-anchored shopping center has 95,092 square feet and is currently 95% occupied by tenants including Food World (anchor tenant), Movie Gallery, H&R Block, Subway, and Curves.

Situated on 6.2 acres, Hampton Plaza is located at 5300 Gunn Highway near the Citrus Park Town Center. The 44,420-square-foot, neighborhood center was completed in 1990 and is currently 95% occupied by tenants including Big Lots (anchor tenant), Dollar General and Metro PCS.

HFF (NYSE: HF) operates out of 18 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry.

HFF offers clients a fully integrated national capital markets platform including debt placement, investment sales, structured finance, private equity, loan sales and commercial loan servicing.


C. Whitney Knoll, HFF Senior Managing Director, 404 832 8460,

H. Bradley Peterson, HFF Mnaging Director, 407 514 2620,

Kristen M. Murphy, HFF Associate Director, Marketing, 713 852 3500,

Tri-City Electrical Starts $505,000 Apartment Job in Hillsborough County, FL

HILLSBOROUGH COUNTY, FL – Orlando-based Tri-City Electrical Contractors, Inc. is under way on $505,000 of work at the new 122,804-square-foot, 96-unit Hunt Club Apartments in Hillsborough County, FL, under its contract with First Florida Construction, Miami. Completion is slated for May 2009.

Contact: Kenneth H. Cristol, 407-774-2515

Terry's Electric Completes Job at Villas at Lake Eve Condo-Hotel in Orlando, FL

ORLANDO, FL – Terry’s Electric, Inc., one of Florida’s leading electrical contractors, completed a multimillion-dollar electrical contract at the new 14-story, 176-unit, 266,966-square-foot Villas at Lake Eve Condominium/Hotel (top right photo) located on International Drive, Orlando, FL. The Douglas Company, Orlando, serves as the general contractor according to Mark Neveu, Commercial Divisionpresident of Terry’s Electric.

Contact: Kenneth H. Cristol, 407-774-2515

Melrose-Sovereign Companies awarded contract to manage Harmony Community in Osceola County, FL

ORLANDO, FL -- Melrose-Sovereign Companies, a property management firm based in Orlando with more than 100 employees and offices in Jacksonville, Tampa, Bradenton, Fort Myers, Palm Harbor and Port Charlotte, has been awarded a contract to manage the Harmony community in Osceola County.
(Ashley Park pool, Harmony, FL, top right photo)

Ellen G. Lumpkin, co-founder and partner at Melrose-Sovereign Companies, said Harmony, located off U.S. 192 between St. Cloud and Melbourne, includes more than 7,000 residential units planned or under construction.

Jack B. Hanson, co-founder and partner at Melrose-Sovereign Companies, said the firm currently manages properties for more than 150 developers, investors and owners throughout Florida, including Taylor Morrison Homes, Ryland Homes, The Landmark Group, Emerson International and Benderson Development Corp.

For more information, contact:

Ellen G. Lumpkin, Partner/Co-founder, Melrose-Sovereign Companies 407-228-4181;;

Jack B. Hanson, Partner/Co-founder, Melrose-Sovereign, Companies 407-228-4181;;

Larry Vershel or Beth Payan, Larry Vershel Communications 407-644-4142;