Blackstone's Tony James Hires Real Estate Head for Family Office

(Bloomberg) -- Tony James is on the hunt for real estate.

Jefferson River Capital, a family office that invests on behalf of the Blackstone Group LP vice chairman, recently hired Bill Helm for the newly created role of head of real estate investments. A representative for the New York-based firm confirmed the hire. Jefferson River has yet to make a real estate investment, according to people with direct knowledge of the matter.

The initial focus will be on multifamily, industrial and office properties in the Northeast and Southeast U.S., where the firm sees solid population and employment growth, particularly in knowledge-based jobs, according to one of the people, who asked not to be identified because the information is private.

Prior to joining Jefferson River in May, Helm worked about eight years at DLJ Real Estate Capital Partners, which was spun off from Credit Suisse Group AG in 2010. He earlier spent a combined 15 years at Credit Suisse and Donaldson, Lufkin & Jenrette.

Blackstone's Tony James Hires Real Estate Head for Family Office

James’s wealth -- about $2.5 billion according to the Bloomberg Billionaire’s Index -- is spread across at least two family offices, Jefferson River and Swift River Investments. The former, which is named after a waterway that runs through his family’s Montana ranch, was set up in 2016 and has been involved in several small private equity transactions. They include backing Autism Learning Partners, a Glendale, California-based therapy provider to children with autism spectrum disorders, and Portsmouth, New Hampshire-based Legacy Global Sports, which hosts hockey, lacrosse, football and soccer youth tournaments.

Venture Capital

Jefferson River also has participated in venture capital funding rounds, including those of Digital Asset Holdings LLC, a financial technology firm led by former JPMorgan Chase & Co. executive Blythe Masters, and Pulmotect Inc., which develops inhaled drug technology designed to boost immune response in lungs.

James’s real estate holdings include a duplex on Manhattan’s Upper East Side that formerly belonged to Broadway director Hal Prince, which he bought in 2011 for $24.9 million. His Swift River acquired the 34,000-acre Hamilton Ranch in Montana in 2011, according to local media reports at the time.

Last year, James’s brother, David James, told the Wall Street Journal that Swift River is no longer as active as it had been.

Family offices can raise potential conflicts of interest, which can be alleviated by requiring employer approval before proceeding with personal investments. That’s the case at firms such as Blackstone and Carlyle Group LP, though conflicts can still arise.

Declaration Capital

For example, Carlyle has pledged to invest 150 million pounds ($191 million) in a London-based flexible-office and co-working business called Uncommon. But just last month, Declaration Capital, which invests the wealth of Carlyle Chairman and co-founder David Rubenstein, participated in a $152 million fundraising round for Convene, a similar flexible-office business. The company plans to use the new capital to expand into London and other cities, potentially pitting it against Uncommon as a competitor for tenants and highly-coveted locations.

The Convene investment was vetted by an internal committee and approved, a Carlyle spokesman said. It gave Declaration Capital a stake of less than 3 percent in Convene and no board representation, according to a Declaration Capital spokesman, who described it as a “tiny, passive investment.”

Blackstone itself is a real estate behemoth with $120 billion under management as of June 30. Jon Gray, the firm’s former head of real estate, replaced James as Blackstone’s president and chief operating officer in March.

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