Quarterly Round Up

BERKELEY INSIGHTSEVENTSMARKET UPDATESOUR COMPANY
ISSUE 1 - Q1 2020

BERKELEY INSIGHTS

Team Building Activities

We invest heavily in our team at all levels in a productive and family-oriented environment. We put as much care into hiring and growing our staff as we do with our investment decisions. We choose to operate a flat and highly collegial team environment, as we believe that is the best way to grow staff at all levels and foster a team atmosphere.

This was one of the driving factors when choosing the design of our new Dubai office in Boulevard Plaza, Downtown. We have a completely open plan office, which sits staff at different levels all together.

Outside of work, we incorporate a variety of team building activities that focus on the physical and mental well-being of each of our team members. Activities range from puzzling escape Rooms to paint balling to a team treasure hunt in the desert. 

Philanthropy is also a global key focus for the firm. We are proud to work with Action for Children in the UK, where we actively encourage clients and staff, old and new to make a difference through donations and voluntary work. We actively encourage our staff to involve themselves in philanthropic activities, no matter how small.

International Women’s Day

We have established several women empowerment initiatives within the firm to attract and retain talented women. As a global firm, we want to engage and inspire female employees at all career levels.

We took pleasure in celebrating International Women’s day on the 8th March, which was cemented with the number of female positions doubling globally over the past 12 months.  Archna Cummings, Head of Operations, our chief advocate for driving Women Empowerment initiatives also received the Entrepreneur Middle East Achieving Women Awards. This is a testament to her hard work and perseverance.

Staff Training

We are strong advocates of bespoke hands-on-training, so everyone is developed both technically & personally by enhancing their industry knowledge and soft skills. From the top down, our Partners want to see staff grow and develop their skillsets to become well rounded individuals, across all our offices.

Training programmes range from impromptu group presentations to encourage active thinking under pressure, to written exercises in order solidify both verbal and written communications. This applies to both client facing and non-client facing staff as everyone is expected to grow.

This quarter also saw the yearly update of our global staff handbook, detailing all internal policies and ethical practices, that we expect staff to embody both inside and outside of work.

EVENTS

Novus news

We recently launched our unique client benefits programme - Novus by Berkeley Assets. It is a unique platform strictly for our clients. Novus is the entry point to a world of incredible experiences and exclusive benefits through our extensive partner network of luxury brands.

Our exclusive Novus mobile application is ready for launch in Q2 2020. It has been designed as the ideal place to keep track of benefits and the exciting Novus managed events we have coming up. These include wine tastings, private dinners, access to your favourite acts at the Coca Cola Arena courtesy of our hospitality box and much more! In the subsequent weeks, there will be a guide on how to download, register and redeem benefits through our partner network. 

We look forward to presenting all our clients with their Novus membership pack very soon. At Berkeley Assets, we strive to do things differently and ensure that every interaction with our brand represents a meaningful and memorable experience.

Events

Both institutional and private clients of Berkeley, along with a handful of guests, wrapped 2019 up in style at the Abu Dhabi F1 in November. Our trackside superyacht provided the perfect viewpoint to watch the action and celebrate Lewis Hamilton taking his fifth win in Abu Dhabi. 

With health high-up on the agenda, we have decided to postpone our spring event. Fortunately, the view of this location isn't going anywhere, and we look forward to sharing it with you once the world is back in order. Keep an eye on your inbox for more information.

COVID-19

COVID-19 has been a testing time for everyone in self-quarantine. For us, we are using this time as a firm to globally strategise and plan. While we have more time on our hands, we are finalising our expansion plans for the next 24 months to enable us to carry forward momentum into Q3 and Q4. This has served as a time for reflection and an objective review on what can be done more efficiently.

Staff and client contact have been key in this time, with regular email, video and teleconference calls being a firm fixture in everyone’s diaries. For clients, it has been vital to keep them up to date with any changes and viewpoints we may have. For staff, it has been vital to maintain our training schedule and ensure that all staff are healthy and well.

MARKET UPDATES

Prvate Equity News

For the private equity industry, we expect deal making volume to decrease, with a potential increase in deal value. 

Deal making will understandably decline as a natural follow on from this economic climate. As purchasers demand lower prices and vendors hold out for better bids, there becomes a market mismatch for deal making. However, vendors will be likely entering into the market out of need, rather than want, putting vendors on the back foot.

Lending will tighten from banks and credit houses; however, we doubt it will completely freeze as it previously did in 2008. As PE firms move to fill this funding gap, this could lead to two distinct trends. Firstly, firms may decide to call the unprecedented amounts of unspent committed capital (known as dry powder), currently valued at 2.5TN USD. 

Secondly, firms may plug some of this liquidity gap as banks back out the credit scene. Since 2008 the level of opportunistic private lending funds has increased three-fold as firms look for short term dislocations to lend against at favourable rates. 

As public markets deflate, corporates will hold their cash meaning competition for available deals with solid fundamentals will certainly increase in the favour of PE firms, just as it did in 2009.

Global Markets: An overview

If the pandemic peaks in Q2 and recedes in H2, 2020 global growth is predicted to fall to -3%. This is a downgrade of 6.3% from January 2020. This makes the Great Lockdown the worst recession since the Great Depression, and worse than the Global Financial Crisis.

Emerging market economies will face the toughest challenges with reversals in capital flows and currency pressures, while coping with weaker health systems and poor fiscal ability to provide support. Entertainment, travel and tourism industries will be the first to hurt as well as companies with high debt costs to service.

OUR COMPANY

Global Growth

2019 was a phenomenal year for us in geographical expansion, as we extended our reach into Europe and Latin America, with satellite office openings in Spain and Mexico. The beginning of 2020 also saw the opening of our new Asia HQ in Dubai.

As the in-house capital raising team has grown globally, the need for an Asia HQ office was required as MENA and APAC activity has increased substantially over the recent years. Our HK and Singapore offices now report directly to our Asia HQ, with a view to increase our physical presence in those regions in Q4 2020.

Virtual reality technology is well underway and will be available to clients in Q2 2020. We will be one of the first to make this state-of-the-art technology available to both private and institutional clients in the private equity arena.

We plan to deploy capital into new projects in Q4 2020 as we anticipate distressed sellers will be needing liquidity, as a product of the economic climate. Both hospitality and leisure business will be drastically affected, allowing favourable lending positions with equity conversions. We will maintain our stern due diligence and ultimate downside cases will have to be modelled to provide comfort, while maintaining our ethical approach to asset selection.

Latest Projects

We have recently seen exits from a number of development financing projects, netting us annualised yields ranging from 12-15%. These included student accommodation in Cardiff, residential developments in Liverpool and real estate logistics assets in London.

Our next exit is set to be an assisted living project in Britannia Works, Atherstone, a beautiful market town in Warwickshire. This development started on June 2018 and has created a 128.7% return on investment with an annualised yield of 67.2%, upon full exit in May 2020.

Partnerships

January saw us tie the knot with Dubai Offshore Sailing Club (DOSC), the longest standing members club in the UAE, dating back to 1974. 

Through this partnership, we aim to enhance their sailing and racing experience supporting 27 races that comprise the Commodore’s Cup. Members can expect plenty of occasions to look forward to in 2020 with standout prize ceremonies and family-orientated events. 

Our alliance with this local institution is a first of its kind for the company and we aim to establish further strategic relationships with local organisations in the UK & UAE.

Offshore - Multi-Asset Private Equity Firm of the Year, Berkeley Assets
Young CEO of the Year Award 2019
Achieving Women’s Award in the Private Equity Sector 2019
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Offshore - Multi-Asset Private Equity Firm of the Year, Berkeley Assets
Young CEO of the Year Award 2019
Achieving Women’s Award in the Private Equity Sector 2019