There is nothing quite like the excitement and anticipation of expanding a business globally: excitement at the prospect of launching your investment model to a more global yet local clientele, alongside the anticipation of new deals, relationships, and opportunities that could be achieved.
It is a scenario we at Avignon Capital know only too well. The rise of globalisation in recent years has seen us appreciate the importance of becoming an investment manager that is able to work at scale across a range of global locations. As a result, over the past four years, Avignon has expanded its investment capabilities to no less than seven international markets including Denmark, Holland, Germany, Spain and most recently, Australia.
When taking the decision to launch in a new market, it is a carefully researched and measured one. Our dedicated team of investment managers and analysts undertake an enhanced research and due diligence process of each market we hope to work in, to ensure it meets our mandates and/or property requirements. This also helps us to anticipate success because as a long-term investor, we understand the market, sectors and the people with whom we invest.
As a boutique investment manager, it is in our DNA to learn markets and the fundamentals very quickly. Researching a new market and a new property sector is one of the most challenging and rewarding parts of being a boutique investment manager. We believe it is our duty to look for the best opportunities, regardless of geographical restraints. And we work with a deep network of contacts on the ground to ensure we identify and assess them continually. We have strong macroeconomics expertise and are led by market fundamentals to identify market opportunities.
It was by observing ongoing market trends and our detailed research process that led to us acquiring assets in Copenhagen, at a time when few international investors were in the market and yields were heavily discounted. We acquired a number of assets with strong fundamentals that we knew would be resilient in a variety of market conditions. Avignon completed the sale of the Louis Vuitton building in 2016, for €26.8m, which set a new benchmark yield for retail in the Copenhagen market and crystallised a return on equity of 112% in under 4 years.
There is little doubt that as a boutique firm we have to work harder to ensure success is achieved in international markets. That’s why our private equity instinct with institutional diligence allows us to think ‘big’ and actively compete in this marketplace. Just look to our global track record to date for encouragement – last year we transacted on average every two weeks.
Despite this, Avignon’s ambition is not to become a ‘huge’ company. We aim to be a successful one, particularly as we look to bring more investment mandates to a number of new global markets in the coming months.