Earlier this month, global real estate investment manager Hines launched the Hines Private Wealth Solutions platform. Since the firm has been offering real estate investment opportunities to private wealth investors for the past 20 years, raising close to $11 billion by the end of 2023, the move was more of a rebranding than a launch, according to Paul Ferraro, who joined Hines from The Carlyle Group two months ago to lead the effort.
The firm, whose offerings in the private wealth space include non-traded REITs and a real estate exchange, has relied largely on independent broker/dealers to reach high-net-worth investors in the past. Ferraro’s task will be to duplicate what he did at Carlyle—develop Hines’ relationships with RIAs and family offices, as well as with wirehouses, launch new semi-liquid funds and expand the business in Europe and Asia.
WealthManagement.com recently talked to Ferraro about his new role and what we should expect to see from Hines Private Wealth Solutions as it grows.
This Q&A has been edited for length, style and clarity.
WealthManagement.com: Hines has already worked in the private wealth channel for the past two decades. What was the impetus to create Private Wealth Solutions right now?
Paul Ferraro: The Hines Private Wealth Solutions platform builds on the momentum of the firm’s 20-year history that you spoke of. We are calling it a rebranding rather than a launch. In my opinion, it is part of a natural evolution of the business. It really reflects on commitment to offering quality products to a variety of investors, both in the U.S. and around the world.
Like our peers, we see the enormous potential in the private wealth channel. What’s different about Hines is we believe our position as a real estate leader with global footprint and 65+ years experience makes us uniquely qualified to develop, manage and operate real estate assets in what is turning out to be an ever-changing environment.
My job is to capitalize on the expected growth of private wealth in broadening and deepening our relationships across distribution channels, expanding in Europe and Asia and providing investment opportunities across the risk/return spectrum designed to meet the goals of our clients.
WM: Has Hines set any goals in terms of how much it would like to grow fundraising from the private wealth channel?
PF: We don’t publicly state goals like that. What we are trying to do, though, is build a platform that’s diversified across distribution channels both here in the U.S. and across the globe, so I think you can probably read into that that the financial goals are aggressive, as they should be.
WM: You headed private wealth at the Carlyle Group before you came to Hines. What were some of the biggest takeaways from your role there about how to grow distribution channels for Hines?
PF: At Carlyle, I was employee No. 1 for Carlyle Private Wealth. I was brought in from Morgan Stanley to really to build the business. And if you fast-forward a decade plus that I was there, we had distribution businesses that were covering wirehouses and independent broker/dealers, an RIA and family office team, teams in Europe, Asia and Canada and we had amassed about $50 billion of commitments over that time. During that period we also created four evergreen semi-liquid offerings covering both credit and equity in the U.S., Europe and Asia.
There is only really a handful of people in the industry who built similar businesses. My plan is to use that playbook on how to do it successfully and execute it here at Hines.
WM: How does the firm currently get its products that are available for individual investors in front of advisors?
PF: The firm historically has really focused heavily on one particular private wealth channel. And what I’ve been asked to do is to expand that business significantly through new client forums, RIAs and then multi- and single-family offices.
To get our products in front of these clients, No. 1, we need to build the infrastructure necessary to do so, and that’s happening right now. That will allow us to launch new products that cater to the way RIAs and financial advisors consume them today. We are also looking to efficiently deliver our direct deal content—not just funds—directly to RIAs and wealth management partners and family offices.
That’s the first two things—to create the delivery systems necessary, but it’s also coming up with the right strategies and return profile and risk tolerance for those markets.
WM: You said the firm was heavily focused on one particular private…
Read More: Q&A: Hines Private Wealth Solutions’ Paul Ferraro