Strong Relationships Yield Results

Joshua Varghese's picture

In 2014 Signature Global Asset Management opened its Hong Kong office by sending one of our employees, Gorlen Zhou, to the region to open an office. The goal was to establish presence for our group in the Asian markets by developing local expertise and strong relationships with corporations, trading desks, research analysts and investment bankers. This, among other things would allow our Toronto office to have boots-on-the-ground insights and access to opportunities. Gorlen and Signature have spent the past several years building the team up further from there, and our Asian platform continues to grow.

Our real estate team has been no stranger to collaborating with our Asia team. However, the most recent deal we participated in has been the most significant exhibition of collaboration between us to date.

The opportunity

In early 2019 Gorlen reached out to us highlighting what he believed to be a very attractive and unique investment opportunity. ESR Cayman – the manager of the largest Asia-Pacific focused logistics real estate platform with over US$14 billion of assets under management (AUM) was looking to enter the public markets via an IPO to raise US$1.5B. The brokers leading the deal knew of Signature and our sizable global real estate platform, and they knew our Hong Kong office well, so they approached Gorlen.

The merits

The deal immediately looked interesting to us. Prologis is the largest industrial warehouse company in the world, and it is one of our largest positions. Global Logistics Properties (GLP), a formerly publicly traded warehouse company focused on global markets including Asia was also a company we had owned before it was taken private in 2017. We have spent many years studying and investing in global warehouse companies and are increasingly bullish on the sector. ESR Cayman was formed in recent years by former executives from Prologis and GLP. Their business is asset management of industrial properties. We like this business model because of its capital-light nature, whereby ESR doesn’t have to own 100% of all properties it operates and develops. Rather, it raises third party capital from investors to buy and develop logistics properties and collects a fee to manage them. Secondly, Asia is drastically undersupplied in high-quality logistics warehouse facilities. This, coupled with a rising income population, significant e-commerce growth, and large amounts of money seeking to invest in industrial real estate, leads to a solid fundamental setup for the asset class. Our Hong Kong and Toronto offices agreed – this opportunity merited more work.

The due diligence

We conducted intensive research on the company. Gorlen met with the management team several times and visited their assets in Korea and China. I spoke with the management team several times and visited their team and properties in Singapore. I was also connected with their leadership in India to gain an understanding of their opportunity there. I met with several of their competitors to gain a better understanding of the regional opportunity. It is large. To sanity-check the opportunity I spoke with Phoebe Hong, our consumer specialist in Asia who provided me with good perspective on the logistics needs of the e-commerce players in the region.

The conclusion and the result

We reconvened and concluded that this was one of the most attractive opportunities in our global real estate universe. After back-and-forth discussions on pricing we liked the price that the deal was coming out at. After a withdrawn IPO attempt in the summer due to global market turmoil and noise around the Hong Kong protests, ESR came back to us in October (half a year after we first started doing the work), ready to do the IPO. There was a wrinkle this time though – OMERs, one of the larger and more sophisticated global real estate players, was coming in to take a $600M cornerstone position in the deal. Another large global player was anchoring the deal with a $400M order. While this was an exceptional endorsement for the deal, this left very little for the large global investor community to get a hold of. In fact, we understood that the deal was over seven times over-subscribed. The work we had been able to do so early on allowed us to move swiftly on our order. We spoke with the management team and bankers several times that week and found that the interest we had shown in the company, and the relationship we developed over the previous several months had paid off – we were given one of the top allocations to the deal in the world. We understand that we were the only Canadian investor in the deal other than OMERs. We look forward to seeing what our newest investment can do.

As I mentioned in my April blog on Embassy Office Parks, the Signature real estate team is comprised of three people, however it is the full support of our 50-plus team members that allows us to access such unique global opportunities. We are really seeing the advantages of this compound in ways that I believe will continue to benefit our unitholders.



Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

The author and/or a member of their immediate family may hold specific holdings/securities discussed in this document.  Any opinion or information provided are solely those of the author and does not constitute investment advice or an endorsement or recommendation of any entity or security discussed or provided by CI Investments Inc.

The opinions expressed in the communication are solely those of the author and are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. 

Certain statements contained in this communication are based in whole or in part on information provided by third parties and CI Investments Inc. has taken reasonable steps to ensure their accuracy. Market conditions may change which may impact the information contained in this document.

Certain statements in this document are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “believe,” or “estimate,” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what CI Investments Inc. and the portfolio manager believe to be reasonable assumptions, neither CI Investments Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

Signature Global Asset Management is a division of CI Investments Inc. Certain funds associated with Signature Global Asset Management are sub-advised by CI Global Investments Inc., a firm registered with the U.S. Securities and Exchange Commission and an affiliate of CI Investments Inc.

Signature Global Asset Management and the Signature Global Asset Management logo and design are trademarks of CI Investments Inc. CI Investments® and the CI Investments design are registered trademarks of CI Investments Inc. ©CI Investments Inc. 2019.  All rights reserved. “Trusted Partner in Wealth™” is a trademark of CI Investments Inc.

Publication date: November 8, 2019

Add new comment

We welcome your comments and questions for the Signature team and will respond as soon as possible. Please note that all comments are reviewed for their relevance to the topics discussed in the blog, and that comments may be edited.

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.