Allrise Financial Group plans to expand from a conglomerate operating largely as a family office to an investment manager with real estate debt funds backed by institutional investors, new chief executive Inna Zhuranskaya told Real Estate Capital’s sister publication, PERE.
The California-based firm plans to provide real estate debt in the US market and will also target Central and Eastern Europe.
Zhuranskaya took the helm of the company last month. She got her start in real estate at Singaporean sovereign wealth fund GIC, and has worked at Deutsche Bank, Merrill Lynch and, most recently, American bank Sterne Agee. At Allrise, she works under founder Vladimir Evseev, who is now the firm’s chairman.
“I wanted to have something where I can put a bit of a stamp on what I’m doing and somewhere that I can participate in building the business,” Zhuranskaya said. “Allrise is a very interesting company, with $300 million in revenue and many entities within the group structure involved in various activities, all of them growing.”
The company was founded as a micro-lender and now has businesses ranging from a San Francisco-based real estate developer to a Las Vegas entertainment producer.
In real estate, the company focuses on bridge loans, lending $1 million-$30 million per deal. In the past, Allrise has corralled capital from high-net-worth investors for small lending funds. Under Zhuranskaya’s leadership, the firm plans to raise institutional capital, from firms such as pension funds and insurance companies, for real estate debt funds that she expects to launch in the summer.
In the US, the firm is planning to raise $100 million to $200 million for a fund focused on traditional and senior bridge loans.
“We’re not going to go massive,” Zhuranskaya said. “Sometimes you can raise too much and you can choke. We will contribute a significant chunk of our capital and have three small institutional investors, and if it’s successful, because we have a pipeline identified, we’re likely to follow with a second US fund straight away.”
The firm also expects to launch two other funds targeting Central and Eastern European countries, both with a similar strategy to the US vehicle. Those funds will focus on new markets for the firm, such as the Czech Republic, Poland and Hungary, as well as existing markets such as Russia and Ukraine. The company has not disclosed targets for the funds.
“In Western Europe, bridge and mezzanine loan segments are more developed,” she said. However, in the CEE countries, “local banks, subsidiaries of German and Austrian banks, will provide senior loans but that’s it. They don’t really have allocations to mezzanine for those markets, so there’s a complete gap. It’s senior or nothing else”.
Allrise is opening a Prague office to support its CEE strategy and is considering co-branding its lending efforts with a local operator.
“We have a strong knowledge of how to write loans. This knowledge is uniform. You can look at different requirements and regulations, but that’s easy. What we’re lacking in those countries is the knowledge of local development procedures,” Zhuranskaya said.