“What I call it is a squeeze play,” Ray said in a phone interview. “You can squeeze the bottom part” of the capital structure, in this case equity holders Carlyle and Ashkenazy, he said.
CIC began investing in the U.S. as the credit crunch took hold in 2007, buying stakes in financial-service companies such as the private-equity firm Blackstone Group LP and the investment bank Morgan Stanley, both based in New York. The Wall Street Journal reported in June that the sovereign fund was looking to invest in U.S. real estate through vehicles run by North American money managers.
CIC acquired a 7.6 percent stake in General Growth Properties by joining a $5.5 billion investment group that Toronto-based Brookfield Asset Management Inc. formed in August 2009 to acquire distressed commercial real estate. Bank of China agreed to lend the $800 million to refinance an office building on Manhattan’s Park Avenue that is majority-owned by Brookfield Office Properties, a New York real estate developer and manager that is 50 percent held by Brookfield Asset Management.
Wildauer declined to comment on whether CIC had invested in any of the real estate funds run by AREA, founded in 1993 by William Mack and Leon Black, the chief executive officer of Apollo Global Management LLC, to invest in distressed real estate. The firm, originally called Apollo Real Estate Advisors, was spun off from Black’s private-equity operations in 2000 and changed its name to AREA in early 2009.
