They've been friends for some 30 years and developed working relationships at Standard Life Investments and Fiera Properties for close to 20; now Peter Cuthbert and Blair McCreadie have launched Beausoleil Real Estate Investments Ltd.
Beausoleil, named after a Georgian Bay island where McCreadie’s father was a camp counsellor and where the two managing partners first met, is a real estate investment management and advisory firm specializing in portfolio and fund management.
“We've been in the business through multiple cycles, which brings a unique view to real estate and also helps us in this current market cycle,” McCreadie told RENX. “It's a bit of a clean slate for us to invest appropriately.”
Cuthbert left his position as president of Fiera Properties two years ago and has since spent a year as a partner with Colliers and as an independent consultant. McCreadie left his job as Fiera Real Estate’s head of Canadian real estate and fund manager in December.
Both men said parent company Fiera Capital was moving in a different direction and, since they’d successfully helped built two real estate platforms together, decided to launch their own firm.
“We're not interested in being the biggest,” Cuthbert said in the interview. “We're interested in being a high-quality, high-value investment shop.
“We're defined by the company we keep, which would include our investors, our suppliers and our partners, and the idea is if you do things really well, the market will tell your story.
"And those suppliers, contractors and partners will want to do business with us because it will say something about them as well.”
Cuthbert and McCreadie have developed two major real estate investment management businesses that have raised and deployed more than $9 billion into a range of Canadian real estate sectors, regions and strategies in both open-ended and closed-ended formats.
They’ve managed bespoke separately managed accounts, worked out distressed portfolios and presided over three successful open-ended funds which are part of the MSCI/REALPAC Canada Property Fund Index.
The two men have taken active roles in: raising capital; environmental, social and governance initiatives; compliance; and investment, asset, risk and general business management.
“There aren’t enough multi-strategy national managers in Canada and feedback we've had from consultants and investors that we know well have said there's room for another manager in this space,” Cuthbert said.
“There's room for an independent manager, someone who's not connected to a major institutional outfit.
"There's room for a new manager who doesn't have some of the legacy assets that some of the large funds might have that could drag on returns at some point.”
Beausoleil’s initial funds
Beausoleil’s first concept will be an open-ended core-plus fund, with an emphasis on the plus, worth around $500 million.
The funds Cuthbert and McCreadie have previously been involved with were heavily weighted to industrial real estate and experienced good returns, but they’re open to all asset classes — including self-storage and student housing.
“Population growth, GDP growth and job growth in future-friendly sectors are the things we'd be looking for,” said Cuthbert.
“And it's not that hard because we’re going to end up in areas with strong, existing built form or urban infrastructure.”
Cuthbert said Beausoleil will also look to develop “a series of closed-ended opportunistic funds that move up the risk curve for people looking for double-digit returns.”
McCreadie said Beausoleil would also like to incorporate an affordable housing strategy in a closed-ended fund and is talking to investors who are involved in that space.
Cuthbert said many investors who got involved with real estate funds 15 or 20 years ago were conservative, but have built a higher tolerance for properly managed risk since then and should be interested in what the company will have to offer.
“The timing is very interesting because we're in a unique period of time where asset pricing may be reset and where some investors with quality assets may be in a little over their head,” Cuthbert said.
“Maybe they're a little too deep into too many projects and have too many assets to deal with. So we think there will be an opportunity that hasn't existed for a while to play in a repriced market.”
Beausoleil’s next steps
Beausoleil’s current focus is on securing initial capital. The goal is to raise enough capital from high net-worth individuals, family offices and institutional investors by the end of the year to begin deployment early in 2024.
“We're aware of some family offices and other organizations who have very limited exposure to real estate that would like to have exposure, so we'll certainly be talking with them,” said Cuthbert.
While Beausoleil’s founders haven’t yet hired additional staff, Cuthbert said they’re taking calls from people interested in what they’re doing.
He’s confident they’ll be able to secure talented colleagues with whom to move into downtown Toronto office space as they move forward.
“We're talking to a couple of investment management firms that don't have real estate on the platform,” said McCreadie.
“We think a partnership there would be quite opportune, to offset office space, back office support, IT, licensing and all of that.
"We expect to announce something in the relatively near future in that regard.”