Investing in Uncertainty: Chad Pike's Billion-Dollar Bet on Makarora
This episode of the Commercial Real Estate Daily podcast is brought to you by CRE Launch Pro. If you’re looking to take your investing skills to the next level with online courses, group coaching calls, and a community of other investors, head on over to www.CreLaunchPro.com
Episode Transcript:
In the world of real estate, a former Blackstone executive is gearing up to ride the waves of market volatility with the launch of a new investment management venture. Chad Pike, a seasoned player with 25 years at Blackstone, is stepping into the limelight with Makarora, a company set to raise billions of dollars. The initial focus is on U.S. transactions, covering private debt and equity, along with opportunities in the public market stemming from market turbulence.
Makarora sees a strategic opening in the commercial real estate sector due to a valuation reset induced by interest rates and regional banking challenges. The firm anticipates a significant cyclical investment opportunity, as outlined in a launch document. The first investment vehicle is slated for a debut next year, aiming to attract substantial institutional investments.
Pike has already assembled a team of 12 executives for Makarora, with plans to expand to a staff of around 40. Among the notable recruits is Adam Brooks, formerly with Prospect Ridge and AllianceBernstein, now leading the credit division. Makarora is entering the scene amid predictions of substantial pressure in real estate, with a vision of navigating a prolonged cycle akin to the 1990s Savings and Loans crisis. The strategy involves strategic acquisitions while competitors grapple with challenges in their legacy portfolios.
The new investment platform's early focus is on credit deals, with plans to venture into special situations and private equity real estate investments later in the cycle. Pike's illustrious career at Blackstone, where he orchestrated approximately $26 billion in property acquisitions, positions him as a formidable force in the industry. His tenure included leadership of Blackstone's real estate platform and the launch of the tactical opportunities business.
Makarora's launch comes on the heels of Pike's departure from Blackstone in 2020, marked as an amicable exit to focus on personal investments, including those managed by his family office, Grassy Creek. However, reports suggest a backstory of internal dynamics, with Jon Gray, now Blackstone's President and COO, playing a role in Pike's departure. Differences in work styles and preferences reportedly led to a misalignment, culminating in Pike's transition to launching the tactical opportunities arm.
As Makarora steps onto the stage, it brings not only Pike's extensive experience but also a keen eye for seizing opportunities in a real estate landscape undergoing significant shifts. The venture aims to chart a course distinct from traditional strategies, leveraging Pike's expertise honed during his impactful journey at Blackstone.
This is Tyler Cauble, Signing off