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A Distinguished Career followed by an Unfortunate Disagreement that remains Undecided I enjoyed
a long and rewarding career
as an institutional
real estate investor. I focused closely on capital raising and investing, and tried to leave the rest to others. 1. CAPITAL RAISING & INVESTING Recognized
by Columbia Business School as my MBA class's Real Estate Merit Scholar and 25th Reunion Chairperson, I worked for leading
investment houses, founded the first private equity firm of its kind, shared credit for developing investment
strategies that reshaped the real estate industry, raised billions from institutional investors, led or approved
billions in investment decisions around the globe, authored white papers, spoke internationally at industry conferences,
received numerous accolades...it was a highly productive career. From early childhood to 1984, I had many kinds of businesses and jobs. From 1984 to 2000, I started as an aerospace engineer with Top Secret clearance helping
develop President Reagan's "Star Wars" missile defense system. After business school, I acquired or financed
billions of dollars in investment grade commercial real estate for top tier investment banks and managers. In 1989, I helped lead my
first real estate secondary investment, the $600 Million GP-led recapitalization of a trophy office building. All
these years later, that would be considered a large secondary purchase. In 1991, I co-founded an RTC-focused "vulture capital" (aka, opportunity) fund. We closed
just one small deal, but I learned a lot. In
1993, I was one of perhaps ten people developing the Commercial Mortgage-Backed Securities industry. I underwrote or approved
loans and other investments, and helped educate CMBS investors and rating agencies. We also financed and brought public new-style
Real Estate Investment Trusts, and formed a ground-breaking mezzanine fund with similarities to secondary investment funds.
Maybe my favorite job ever. From 2000 to 2001, I was the Global
Head and Managing Director of real estate investment banking at the nation's largest commercial bank. I found it to be a deeply
dysfunctional giant. In 2001, after failing as founder of three "Dot-Com" start-ups,
I had the idea for Liquid Realty Partners (LRP), the first and only private equity firm dedicated to real estate secondaries
investing. Put simply, we bought stakes in older real estate funds, and put fresh money into older real estate deals. I wrote
LRP's original business plan (never strayed from it, see bits of it in other managers' offering memoranda) in my stuffed home
garage. My grade school daughter cleverly named the firm, and her concentric doodle warped into LRP's logo. Came to see myself
as a change agent. From 2002 to 2007, I raised four LRP funds with $1.5 Billion in capital
commitments from a who's-who list of institutional investors. We invested globally in all types of GP- and LP-led deals. Like
CMBS, we were a market leader in what has now grown to a Trillion-dollar market. Our investors liked my investments, which
were clocking +20% annual returns, but not the reporting my team produced. I bought out my partner, and set my sights
high. In 2006, I led the $800
Million GP-led secondary acquisition of partnership interests in a high-quality United Kingdom property portfolio.
The deal was nominated by the press as the best real estate investment of the year. It stood as the largest investment
of its kind for ten years. Its size, quality and innovations attracted the world’s largest investors, and made
my firm a market leader. Our investors liked its above-market performance and below-market management fees, but continued
to complain about my team's reporting and, increasingly, their investment decisions. They later left to try their luck
elsewhere. From 2007 to 2011, despite global real
estate values plunging 40%, we provided services that saved our investors' capital. Ultimately, a lender's
attempt to foreclose on our assets was thwarted by my pre-closing negotiations of a discounted purchase price,
conservative loan amount, low interest rate and--to the lender's chagrin--borrower-friendly default cure provisions. I found that
a satisfying way to leave things. 2. RETIREMENT & WIND-DOWN In 2012, feeling grateful for my long strange trip, yet done with working in a largely
unkind industry, I decided to retire. I commenced winding down LRP by letting go of all but one employee. Changed my login password to
"Free". 3. COMPLIANCE & REPORTING
In 2013, a few of my 2006 investors with $1 Trillion in assets asked us to either: (a) return a fee
we charged for our services that saved their investment capital, or (b) be removed as manager of the 2006 fund. For context, our fee was a rounding
error to them, just 0.002% of their assets. I responded by resigning as manager of all four funds to accelerate my industry departure and
sever my connection with people like that. Thus began the bad times. In 2014, unable to
reach a compromise, my companies filed a lawsuit to protect our fee from investors "seeking to avoid paying fair value
for essential services" that we provided: https://storage.courtlistener.com/recap/gov.uscourts.nysd.431825.1.0.pdf In 2017,
after our investors paid us $6 million to settle everything, the
Securities and Exchange Commission
(SEC) published an allegation that we did not disclose the fee and related information ten years earlier: https://www.sec.gov/files/litigation/admin/2017/ia-4641.pdf The press had a field day. Everything else on the web is
more or less fake news sensationalizing the SEC's unproven allegations. For instance, I can apply anytime to end my "permanent"
bar and go back to work...I just do not want to. Do not buy the hype. We will never know how our lawsuit or their allegations would have been adjudicated. Nothing went to court or arbitration. Substantive
differences between our lawsuit and their report were never decided by a judge, arbitrator or any neutral party. Were my companies' lawyers and accountants correct in supporting my companies' fee? Or were the government
inspectors right that my team and I were required to report earlier? It was a technical and complex legal matter. I do not
have an answer. It will remain forever undecided.
4. EPILOGUE On a brighter note, I am
proud of what I accomplished, at peace with the irresponsible press, and have moved to higher ground. I thank the SEC for making our capital markets safer, shutting down its internal court that compelled
me and nearly everyone else they investigated to settle with them, and taking a more mindful approach to publicity in
recent years. And I say, rest in peace, Peter Lewis, who took his life precisely one
year after he was fired by one of the complaining investors. In my opinion, Peter was the only of our investors ready,
willing and able to amicably resolve that unfortunate disagreement.  | 
