A distinguished career followed by

an unfortunate disagreement

that remains undecided

I enjoyed a long and rewarding career as an institutional real estate investor.

Recognized by Columbia Business School as the Real Estate Merit Scholar and 25th Reunion Chairperson of my MBA class, I worked for leading investment firms, 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 great career.

From 1986 to 2000, following a short stint as an aerospace engineer, I acquired or financed billions of dollars in investment grade commercial real estate. I co-led my first real estate secondary investment in 1989 fresh out of business school, the $600 Million GP-led recapitalization of a trophy office building.

In 2001, I founded Liquid Realty Partners, the first and only private equity firm dedicated to real estate secondaries investing. I wrote the business plan in my home garage. My grade school daughter cleverly named the firm. A doodle was warped into a logo. I raised four funds with $1.5 Billion in capital commitments to invest globally in all kinds of real estate secondary investments. Our investors applauded the investments I led, but complained about the reporting my team produced. 

In 2006, I led the $800 Million GP-led secondary acquisition of partnership interests in a high-quality United Kingdom property portfolio. My 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 my investment's above-market performance and below-market management fees, but continued to complain about my colleagues' reporting and investment decisions.

From 2006 to 2012, despite global real estate values plunging 40%, we provided services that saved our investors' capital in that 2006 investment. Ultimately, the lender's attempt to take our assets was thwarted by my negotiations of a discounted purchase price, conservative loan amount, low interest rate and (to the lender's chagrin) borrower-friendly default cure provisions. 

In 2012, feeling content with my accomplishments, but weary of working in a low integrity industry, I decided to retire and began winding down my business.

In 2013, a few of our investors with $1 Trillion in assets demanded that we return the fee we charged for our services that saved their 2006 investment capital from total loss. Our service fee was a rounding error to them at just 0.002% of their assets.

In 2014, unable to reach a compromise, my companies filed a lawsuit to retain our service fee:

https://storage.courtlistener.com/recap/gov.uscourts.nysd.431825.1.0.pdf

In 2017, the Securities and Exchange Commission (SEC) published an investigation focused on their concern with my team's fee reporting, which I had corrected after my colleagues' departures:

https://www.sec.gov/files/litigation/admin/2017/ia-4641.pdf

Nothing went to court or arbitration. Substantial differences between our lawsuit and the SEC's investigation were never decided by a judge, arbitrator or any neutral party. Were my companies' lawyers and accountants correct in approving the fee, or were the SEC's investigators right in alleging that my team under-reported? It will forever remain undecided. 

Unhappy with the behavior of my employees and investors, I accelerated my industry exit by withdrawing my companies as the managers of, not just the 2006 fund with the disputed fee, but all four of our funds. We settled with the investors for a reduced service fee for our 2006 fund, plus expenses and future management fees for all four of our funds. We settled with the SEC for a fine that was paid out of the reduced 2006 fund's service fee, and a post-retirement bar that can be lifted at any time. Lawyer bills, which exceeded the disputed fee, were paid by insurers. Without citing my companies' lawsuit or checking anything at all with me, the press had a field day distorting the SEC investigation's unproven assertions, and undoubtedly sold many ads and subscriptions. 

On a brighter note, I moved to higher ground.

I thank the SEC for making our capital markets safer, shutting down its internal court that compelled almost everyone 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, and in my opinion would have been the only of our investors able and willing to amicably resolve this unfortunate disagreement.