10/20/2010

Lubert-Adler Exec Joins Private Equity Shop

A top executive has left fund shop Lubert-Adler to bring his real estate expertise to Versa Capital, a private equity firm that invests in distressed companies, many with substantial property holdings.

P.J. Yeatman spent 11 years at Lubert-Adler, rising to the post of senior managing principal. He was named a principal of Versa, which is currently investing a $650 million fund.

The two companies, while separately owned, have their headquarters in the same Philadelphia building, share back-office support and are affiliated through an umbrella group, Independence Capital Partners. They have teamed up previously to buy companies with substantial real estate assets, and Yeatman worked on several of those deals.

Versa is tapping Yeatman's real estate know-how as it invests Versa Capital Fund 2. The distressed companies/special situations vehicle, which had its final close last year, invests in North American companies in need of capital for restructurings or recapitalizations. It targets businesses with revenues of $100 million to $1 billion, or assets ranging from $25 million to $500 million. The fund typically invests $10 million to $100 million per deal, with minimal leverage. As of the end of 2009, it was 16% invested.

Yeatman's experience will be valuable to Versa because many of the companies it is targeting have substantial real estate holdings, including retail and office properties, hotels and manufacturing and distribution centers. On some investments, it may continue to team with Lubert-Adler, which is led by founders Ira Lubert and Dean Adler.

At Lubert-Adler, Yeatman worked closely with Versa's team, including Greg Segall, Paul Halpern and Ray French, on such joint deals as the $1 billion acquisition of Central Parking of Nashville in 2007. Also participating in that transaction was Kohlberg & Co., a private equity firm in Mount Kisco, N.Y. At the time, Versa operated under the name Chrysalis.

Yeatman was promoted to senior managing principal at Lubert-Adler at the end of 2007 to replace Gerry Ronon, who left to form Cheswold Real Estate Investment Management of Philadelphia. With Yeatman's move to Versa, Ronon has returned to Lubert-Adler, reclaiming his old title of president and chief operating officer. At Cheswold, Alexia Gottschalch, who joined in June 2009 as a managing director, moved up to managing partner to replace Ronon.

Yeatman shepherded Lubert-Adler's current fund through the marketing process. The company initially hoped to raise $2.6 billion, but freed investors from some commitments amid the downturn. The vehicle, Lubert-Adler Real Estate Fund 6, ultimately took in $2.15 billion of equity. As of the spring, it had invested slightly more than half that capital.

Lubert-Adler is now planning a "sidecar" that would invest alongside the fund and make up for some of the lost commitments. Ohio Public Employees, for one, has made a $200 million commitment to the sidecar.

Fund 6, which seeks a 20% return, invests in distressed properties and debt, primarily in the U.S. Up to 10% of its equity can be deployed in Europe and Asia.

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