Who’d be a banker?The credit crunch, the Northern Rock debacle and Société Générale’s rogue trader, Jérôme Kerviel, have conspired to make bankers as popular as politicians – and in the property sector that is if you can find one. Many property lenders have shut up shop, especially those that sold their loans in the now closed commercial mortgage-backed security market. But, high up on the Mound in Edinburgh’s old town are a team of property bankers who are very much in business. Led by a 52-year-old man from a Dumbarton working class background, HBOS’s corporate arm, Bank of Scotland Corporate, is pressing on with its ‘through-the-cycle’ strategy, determined not to be thrown off track by a property downturn and a global credit crunch. ‘Our job is to ensure that we make money as value players at all points in the cycle, not just the up point or the down point,’ says the man from Dumbarton, Peter Cummings. ‘Our job is to read the cycles properly and to align with the right people, so that if we get into trouble, they can get us out of it. It is also to make sure they are fully funded so they can capitalise on opportunities in this part of the market.’Aligning with the right people is something that sets Bank of Scotland Corporate apart from the herd of property bankers. Back in 2000 it revolutionised property lending when it created what he calls integrated finance, providing not just debt but also equity to ‘best-in-class’ property entrepreneurs. Cummings, who says he gained his love of property in the 1990s recession, when he was in charge of corporate recovery at the bank, is undoubtedly one of the key wealth creators in UK property, responsible for making wealthy and successful entrepreneurs, such as Nick Leslau, Jamie Ritblat, Mark Steinberg, Elliott Bernerd and Bruce Ritchie, even wealthier and even more successful. Outside the property sector he helped finance Sir Philip Green’s £850m acquisition of Arcadia retaining an 8% stake and the Barclay brothers’ £840m takeover of Littlewoods. So successful has Cummings’ strategy been that the six divisions within his £100bn corporate empire – of which property lending and property joint ventures are two produced 40% of HBOS’s profits in the first half of last year, up from 20% in 2001. Corporate’s profits were £1.24bn in the six months to 30 June, beating the retail division’s profits of £1.04bn. Full-year profits for 2007 are expected to be announced on 27 February analysts are forecasting £5.7bn.Traditional lendingBank of Scotland Corporate still provides traditional loans to property investors through Nick Robinson’s real estate team and, with a loan book of £30bn, it is either the largest or second-largest lender to UK real estate. Its great rival, the Royal Bank of Scotland, is up there with it in terms of size, but does not reveal the size of its property loan book.But it is the debt and equity financing, carried out by John Moran’s £18bn joint venture team, that has really put the bank on the map. In just seven years, Moran’s team has invested in the UK more than £10bn in 125 deals with more than 70 partners. Having just enjoyed a spectacular five-year bull run in UK property that ended last year, investors might forget that, when Cummings embarked on his bold new strategy, property was anything but popular, spurned for being old-fashioned in the shortlived dot.com boom.‘The integrated finance model started in 2000 when we decided that there were significant defensive positions we could take when the world was moving away from what was traditionally our arena of private equity and straight real estate,’ Cummings recalls. ‘Real estate was then an orphan sector. Banks had memories of the recession and so did we. ‘We believed there was significant undervalue in three sectors in particular: housebuilding, real estate and hotels. And because of their defensive nature and asset backing, we proposed to our board that we should take equity in these sectors. As a bank we were fundamentally about value protection. ‘We were blending that value protection with real value creation. How we did that was by understanding the sectors, but most importantly aligning ourselves with the “best-in-class” operators. And we avoided institutional partners and went towards entrepreneurial partners.’Backing underdogsOur job is to read the cycles properly and to align with the right peoplePeter CummingsCummings initially targeted companies that were undervalued or undercapitalised. In the first 18 months he took several public companies private. In the real estate sector there was Moorfield, Compco, Chelsfield and Green Property; in housebuilding there was Cala, Linden and Wainhomes; and in hotels there was Macdonald Hotels and a tie-up with Sir Rocco Forte’s RF Hotels.‘We became aligned with some pretty key partners who are still with us today,’ says Cummings. ‘Our ethos is one of partnership. We don’t have the arrogance to act as principals and we would never compete with our clients. ‘What we bring to the party is the ability to scale up some outstanding property people, bringing our financial muscle and financial engineering and insight into the market.’Taking such a big punt on sectors that were derided in the dot.com boom as ‘old economy’ was brave and, ultimately, perfectly timed. ‘You have to give us credit for that,’ says Cummings. ‘The people we surrounded ourselves with we thought long and hard about. In the joint venture business, that type of arrangement is not for everyone. ‘We were like the bridegroom, we did the asking. A lot of people came through our door. This is about equity, and that’s pretty precious. We were quite clear who we wanted to deal with and who we didn’t.’Cummings says there is no strict formula to the way the joint ventures are structured. ‘It depends on the asset class and on what the business needs,’ he explains. ‘Property lending is a cashflow business, it’s not a loan-to-value business. Our models are constructed from a cashflow perspective. They are not constructed around what security we’ve got. Particularly in the arena of value creation how you create value in property is about cashflow. ‘What’s also important is when you’re going to exit, how you’re going to exit and what you do in between to create value. I know that sounds very simple, but there aren’t as many people that can do that as you’d think.’So, what type of person is he looking for, what makes an entrepreneur? ‘There are different personalities but they often display the same traits,’ Cummings replies. ‘The traits for me that define entrepreneurialism are that they have the ability to spot the opportunity. Second, they have within them really outstanding risk assessment processes. Third, they surround themselves with the correct people. Fourth, they have the ability to execute both at the entry and exit points. ‘And they also have the genuine ability to recognise what they’re good at and what they’re not good at. The added value is what they’re good at. And what they’re not good at, they surround themselves with people that can do that. We want them to focus on what they’re good at and to recruit good people to address the things they’re not good at.’‘Nick Leslau is outstanding as a property individual. I’m not telling you what he’s not good at, but he addresses the things he’s not good at. And he’s clear in terms of the opportunity, he’s clear about his risk analysis of that opportunity and he’s clear about his entry point and is highly disciplined.’Leslau is making the most of Cummings’ ‘through-the-cycle’ strategy, spending hundreds of millions of pounds already this year in the less competitive and cheaper-priced UK market. Bank of Scotland Corporate invests in Leslau’s Prestbury fund alongside another equity provider, Sir Tom Hunter’s West Coast Capital. The bank has done a lot of business with Hunter, working in partnership with him in corporate deals such as housebuilder Crest Nicholson, rather than providing equity. As Scotland’s richest man Hunter is not in desperate need of the bank’s equity. Hunter has also taken the bank into new territories. After five years focusing on housebuilding, traditional property and hotels, Hunter and the bank moved into the property-backed area of garden centres, together buying Wyevale and Blooms of Bressingham. The bank also went into the nursing home sector, backing the £280m buyout of Ashbourne Healthcare in 2005. The 200-strong joint ventures team, which John Moran took control of last September, has also expanded geographically, and Moran feels the division’s next five years will be characterised by ‘geographical evolution’. Nick Leslau is outstanding as a property individual. He’s clear in terms of opportunityPeter CummingsIn Europe Moran has teams in France, Spain, Germany and Amsterdam and began investing with UK-based clients, such as Chelsfield Partners, Marcol, Kenmore, Catalyst Capital and Valad. Then last December Moran’s team backed its first European property entrepreneur, Paul Boursican.Alongside Elliott Bernerd and Sir Stuart Lipton’s Chelsfield Partners, Bank of Scotland Corporate is backing Paris-based Milestone Capital, founded by Boursican, who is the former European director and head of French capital markets at Jones Lang LaSalle and founder and managing director of Foncière LFPI, Lazard bank’s real estate fund. ‘We courted him,’ says Moran. ‘This is the start of a big push to extend our joint venture business into Europe.’ Moran works closely with the real estate lending team, headed by managing director Nick Robinson. Like Moran, Robinson only took control of his division last year. An Englishman, he is extremely bright and originally planned to be an engineer. ‘My family are all engineers and geeks, so I was always committed to being an engineer,’ he says.After leaving Cambridge University, he went to Harvard Business School, then to management consultant McKinsey, where he worked in a financial services unit. A year after Halifax and Bank of Scotland merged in 2001 he was hired by Andy Hornby, now the chief executive, to work on the retail side, based in Halifax, running the savings team and helping with post-merger business integration. He had two more senior jobs on the retail side, running the bank Intelligent Finance and then the risk side of the retail division. ‘It was a tough time as insolvencies were growing, impairment charges were going up 50% a year and the analysts were beating us up because they thought we didn’t understand risk,’ says Robinson.‘I was also looking after the balance sheet, which was of limited interest externally until Northern Rock came along.’In the middle of last year Cummings approached him to move to the corporate side and take charge of the £30bn real estate lending division. Robinson says the move was a ‘sideways’ one, but ‘from a career perspective it was a fantastic opportunity’.He looks after 700 people in London, where there are two offices, in Scotland, where there are three, and in the south of England, the Midlands and the north. They provide debt to investors, developers and housebuilders. There are 12,000 customers, but, as Robinson says, they are ‘massively skewed’. ‘We have a lot at the low end 82% deliver 13% of returns’. Like Moran’s joint ventures business, the focus, he says, is on entrepreneurs. ‘Of the top 100 in the property rich list we have 20% and of the top six private housebuilders we have five,’ he says.Two of Robinson’s clients are Kevin McCabe, now working for his own company, Scarborough, and Australian fund manager Valad – and who is also one of the judges in the Bank of Scotland and Property Week’s £30m Search for Property Entrepreneurs and Gladedale’s Remo Dipre. The pair have made extensive use of the bank’s debt. Crunch opportunitiesThe credit crunch and the downturn in the UK property market have inevitably had an effect on Robinson’s team.‘Things have definitely slowed down but not nearly as much as data suggests because we’re still lending and the people we back tend to be the entrepreneurs who are now buying,’ says Robinson.‘The plans we put together last August are still the same. We still want to lend. Costs have gone up for us and structuring has changed, but otherwise we’re the same.’The message is clear: Bank of Scotland Corporate is a through-the-cycle investor and lender. As Cummings says: ‘We see opportunities. Our joint venture partners are fully funded. I have been wishing for the days when we could talk about real estate, not financial engineering, and I think those days are now here. ‘Now is the time for the people who know about real estate to create value and capitalise on the opportunities.’
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Some have restructured their portfolios to be weighted more heavily towards sheds.More will no doubt follow suit. As Ekaterina Avdonina of Delin Capital Asset Management says: if retail and online sales grow at a steady rate of 3% to 5% over the next decade, we are currently only on “day one of logistics growth”.While the opportunity is great, so are the challenges, not least how to deliver the supply required when there is so much competition for sites from other sectors, notably residential.Cue the neat solution of ‘sheds and beds’. Pioneering the concept is a joint venture between SEGRO and Barratt London in Hayes, which will see 230,000 sq ft of logistics space and 1,200 new affordable homes built on the same site. With councils under pressure to facilitate the delivery of both housing and employment space, many will be hoping more such collaborations materialise. Are ‘sheds and beds’ the trend of the future? – Source: Nathan DanielsAnything that accelerates the delivery of new space is to be welcomed when the supply/demand balance remains so off kilter. The shortage is being exacerbated by a significant fall in speculative development, which was down 39% last year on 2015 and has dipped further still this year. Consolidation centres, which are expected to become a planning requirement for large offices in London and other major cities, only ramp up the competition for space even further.The good news is that the likes of M&G are working hard to come up with innovative solutions to the space shortage. In fact, the whole sector seems to be alive to the need for disruptive new concepts – and a good thing too, as without them it will struggle to maintain its recent strong growth.Mia Hunt is Property Week’s market reports editor
DeMoulpied has a Bachelor of Science degree in Engineering Management from the United States Air Force Academy and a Master of Business Administration degree from the University of Dayton in Marketing and International Business. He served six years with the USAF overseeing the development of technology used on fighter aircraft and the E-3 Surveillance aircraft, finishing his career honorably as Captain. Advance Auto Parts announced that Eugene “Gene” Lee Jr., who currently serves as president and CEO and member of the board of directors for Darden Restaurants Inc. (Darden), has been appointed to Advance’s board of directors. Lee’s appointment is effective Nov. 20.AdvertisementClick Here to Read MoreAdvertisement“We are pleased to welcome Gene to our board of directors,” said John Brouillard, executive chairman of the board for Advance Auto Parts. “His experience and leadership skills align well with Advance’s strategic business objectives as we work to serve our customers better than anyone else and become the best parts supplier in the automotive aftermarket. We look forward to his contributions to our board and our company.”Lee has served in his current role with Darden, the owner and operator of Olive Garden, LongHorn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, Eddie V’s and Yard House restaurants in North America, since February 2015. Prior to that, Lee served as Darden’s president and interim CEO from October 2014 to February 2015, and president and chief operating officer from September 2013 to October 2014. He served as president of Darden’s Specialty Restaurant Group from October 2007 to September 2013, following Darden’s acquisition of RARE Hospitality International Inc., where he had served as president and a member of the board of directors since 2001.,Lubrication Specialties Inc. (LSI), manufacturer of Hot Shot’s Secret brand of performance additives and oils, recently announced the expansion of senior leadership. Steve deMoulpied joins LSI as the company’s chief operating officer (COO). AdvertisementClick Here to Read MoreAdvertisement DeMoulpied comes to LSI from the Private Client Services practice of Ernst & Young where he managed strategy & operations improvement engagements for privately held client businesses. Some of his prior roles include VP of strategic development, director of strategic initiatives, and Lean Six Sigma Master Black Belt at OptumHealth, UnitedHealth Group’s health services business, as well as Lean Six Sigma Black Belt at General Electric, where he applied operations improvement principles to customer service, supply chain and product development. A successful entrepreneur, deMoulpied is also the founder of PrestoFresh, a Cleveland-based e-commerce food/grocery business. With more than 20 years of experience across multiple industries and functional areas, deMoulpied has particular expertise in organizations with complex technical products. Combined, his prior positions have required a spectrum of skills in corporate strategy, operations improvement, product quality, and revenue cycle management. He has an impressive history of utilizing data driven problem solving (Lean Six Sigma) and project management (PMP and CSM) to achieve strategic goals surrounding customer satisfaction, operational efficiency and improved profit. LSI President Brett Tennar says, “Steve’s success in developing operational strategies that improves the bottom line, builds teamwork, reduces waste and ensures quality product development and distribution checks many of the boxes of what we were looking for in a COO. This, coupled with his career in the Air Force working with highly technical systems and his in-depth understanding of Lean Six Sigma and Business Process Management sealed our offer. As our tagline states, our products are Powered by Science. This data driven approach is one reason why our company has grown exponentially as we employ the most advanced technology to product development. I am confident that Steve is the right person to drive operational strategy for our diverse and growing brands.” Advertisement
Bollinger Motors filed the provisional patent application on Oct. 12. The patent application number is 17/068,260. The Supervisory Board of Schaeffler AG has appointed Matthias Zink, global head of the Transmissions Systems business division, as a member of the Schaeffler AG Executive Board. His appointment is effective as of Jan. 1, 2017.AdvertisementClick Here to Read MoreAdvertisementZink will succeed Norbert Indlekofer, whose contract was not extended at his own request. Indlekofer will leave the company on Dec. 31, and will continue to perform his role as co-CEO of the Automotive division until that time.The Supervisory Board also decided to extend the contract of Prof. Dr. Peter Pleus, also co-CEO of the Automotive division, for an additional two years until Dec. 31, 2018.Commenting on these changes, Georg F. W. Schaeffler, chairman of the Supervisory Board of Schaeffler AG, said, “We are delighted to have appointed Matthias Zink, a top talent from the Schaeffler Group, to the Executive Board of Schaeffler AG. This is an important signal. At the same time the agreed succession model ensures continuity. Indlekofer will continue to carry out his duties in his usual energetic manner until the end of the year.”,Bollinger Motors has filed a patent with the United States Patent and Trademark Office (USPTO) for its battery pack design. The scope of the patent includes mechanical, electrical and systems-engineering innovations. AdvertisementClick Here to Read MoreAdvertisement The Bollinger Motors battery pack is composed of modules in 35 kWh strings that can be connected in series or parallel to form a variety of pack sizes and configurations. Pack sizes will include 35, 70, 105, 140, 175 kWh, and higher, with many sizes capable of both 350V and 700V configurations. “The heart of every EV is the battery, so it was crucial for us to develop our own battery pack in-house,” said CEO Robert Bollinger. “Our engineering team has created a pack with high-strength structural properties, exemplary cooling features and state-of-the-art software.” The modules are connected to both sides of a symmetrical and structural I-beam. The I-beam includes channels, through which cooling fluid is pumped, to extract heat away from the battery modules. The I-beams also provide cross-vehicle structural support and help protect the pack from side intrusions. Bollinger Motors will manufacture battery packs for its own vehicles – as well as make them commercially available for standalone applications – starting in 2021. The Battery Management System (BMS) has also been developed in-house. The BMS has been created to handle any number of strings, therefore one BMS can be manufactured for all future battery-pack sizes and voltages. The BMS monitors voltage, current, and temperature at multiple points within the pack and manages the system accordingly. It works with other vehicle-control units to maintain optimum operating conditions that increase efficiency and extend battery life. The BMS also provides several features which ensure system safety, including detecting and isolating faults to enable continued vehicle operation.Advertisement Designed for safety, high energy density, and high continuous power capacity, the Bollinger Motors battery pack will be suitable for heavier applications such as medium-duty trucks, agricultural and construction equipment.
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PPG general manager Kevin Stephens said the Sai Freight Group, with over 25 years experience in all facets of logistics and shipping, would have responsibilities for eastern India, joining other Indian members including Express Transport and Sahil Freight Express. Sai Group also owns and operates a 5000 dwt ship around the coast of India carrying heavy lift and project cargo. The ship, which is available for charter, is equipped with a 450 tonne crane and Sai Group says that it plans to purchase a second ship early next year with similar capacity.
DENMARK: Siemens has signed a framework contract with public transport authority Movia to supply rapid charging stations for electric buses, the manufacturer announced on April 11. The charging infrastructure is being deployed as part of a programme agreed in 2017 between 45 municipalities with the aim of making bus transport CO2-neutral by 2030. The three year contract covers the supply of 150 kW, 300 kW or 450 kW charging stations with an inverted pantograph, and Siemens’ eBus cloud remote monitoring system. Siemens will also provide six years of maintenance.
Damas is to be supported by Olivier Fortin, who joins the high speed operator as Managing Director for a fixed period of one year. Fortin arrives at Eurostar on secondment from Caisse de Dépôt et Placement du Québec, which owns 30% of Eurostar through the Patina Rail investment vehicle. He worked with Eurostar in 2015-18 as part of CPDQ’s acquisition and management of the stake formerly held by the UK government through London & Continental Railways.Damas and Fortin will be tasked with managing a restructuring of the business to enable the cross-Channel operator to respond to the effects of the coronavirus crisis.‘Thanks to his proven managerial experience, his acute know-how of the global railway industry and his valuable international experience, notably with Thalys and Eurostar, we are extremely confident in Jacques Damas’ ability to steer Eurostar out of the current crisis and prepare it for future developments’, explained Alain Krakovitch, Managing Director of Voyages SNCF. EUROPE: On September 4 the management board of Voyages SNCF announced the selection of Jacques Damas to succeed Mike Cooper as Chief Executive of Eurostar, in which the French national operator holds a 55% majority stake.Damas is an SNCF veteran whose career with the state railway goes back to 1982; he was Operations Director at Eurostar between 2000 and 2005. He subsequently served as SNCF’s representative at the Community of European Railways in 2009-13 and has held senior management positions with both Thalys and Keolis in recent years. He will take over at Eurostar before the end of September.
AddThis Sharing ButtonsShare to FacebookFacebookFacebookShare to TwitterTwitterTwitterShare to LinkedInLinkedInLinkedInThe Rotary Youth Leadership Award (RYLA) is a scheme which takes small groups of teenagers and challenges them to face their fears, maybe of heights, water, meeting new people or simply being outdoors in the cold and wet. With support and encouragement from professional instructors the groups face a series of challenges, negotiating a high ropes course, rock climbing, mountain walking, gorge climbing, canoeing and raft building.RYLA courses take place all across the world and is regarded as key part of the Youth Programme offered by Rotary International. Here in our District of Southern Scotland RYLA takes place at Abernethy Ardeonaig, in the dramatic setting of the south shore of Loch Tay at the foot of Ben Lawers, in Perthshire. An important part of RYLA is that it is fully sponsored by the Rotary Club who select individuals to take part.This year Kirkcudbright Rotary sponsored four students, recommended by Kirkcudbright Academy, two girls Shannon and Anna, two boys Connor and Finlay. In the nearly three months between selection and going, there were admitted doubts but all stuck the course and on meeting them all were excited about RYLA, had had a great week and made many new friends. One comment “It did you said it would”. But one last hurdle remained to be jumped, to visit a Kirkcudbright Rotary meeting and present their experiences of RYLA to Club members.On Tuesday 7th August 3 of the RYLA group joined us for a meal and were the after-dinner speakers. Each described different stages of their RYLA week and how they felt it may have changed them. All gave their talk in a calm, relaxed and self assured way that impressed Club members, one was heard to say “RYLA is worth every penny!” We were joined by James Gibbons, RYLA Coordinator and his wife Katrina, who is lead mentor for the girls. President Gordon presented each RYLArian with their award certificate.