BY CAROLINE GIBSON
Nevertheless, while this role has been used to varying degrees of efficiency and success in other sectors, the real estate sector has lagged behind. As the European property market attracts further global investment, appointing a senior advisor with an extensive property background and independent perspective is becoming more desirable and prevalent. While senior advisors have often been referred to as a “hand break and an accelerator,” oscillating between the two functions, their role is much more complex. The argument for appointing a senior advisor is easily understood. The experience gained over their career means they can offer strategic insight not only on countries, themes, and trends in the European property market, but also instrumental advice on how firms have successfully, and in some cases not so successfully, expanded their platforms.
The model works equally effectively for both institutions that are new to the region or the sector and those that have a long history of transacting in Europe. A senior advisor is a valuable asset to a new institution. Not only do they bring gravitas and a personal reputation, but they also add deep sectorial insight gained from extensive experience, a skill-set that may be less prevalent in the management team. This is especially common in organizations in which the executive and investment committee, or the bulk of their professional experience, are domiciled in another location. Just as they are for new entrants, a senior advisor can be an effective appointment for those who have a history of transacting in the sector and region. The strategic advice and independent opinion they offer regarding repositioning, expansion, and investor relations can be significantly useful to an executive team. Since the global financial crisis, there have been several examples of this model working productively.
Crucial to the successful appointment of a senior advisor is the relationship between the individual and the company and the three main pillars that underpin it. The first is that the relationship must be based on respect and mutual understanding of the objectives and expectations of both parties. Second to this is the importance of integration, as without this, the role cannot be truly effective. Thirdly, the organization must understand the individual’s motivations and, where possible, shape the role around them. Without the presence of these three pillars, the relationship will not be successful or long-lasting, resulting in disappointment for both parties.
As investment in Europe continues and new entrants enter the market, the demand for senior individuals who offer organizations strategic insight, extensive deal experience, and a solid reputation with a current network will continue to grow. The appointment of senior advisors will be most prevalent in institutions that do not yet want to hire a full-time executive or do not have executives with extensive European real estate experience, but need an experienced individual with a deep understanding of the European property market to advise on the sector. In particular, pension funds, sovereign wealth funds, and family offices are prime targets for increasing their portfolios of senior advisors. As the property industry continues to adopt this model, the biggest hurdle it will face is successfully attracting and retaining the most sought-after individuals. Those platforms that can define a clear plan, execute promptly, and attract this scarce resource will benefit by elevating their proposition beyond their competitors.
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