CDPQ Appoints Rana Ghorayeb as EVP and Head of Real Estate

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Today, CDPQ announced the appointment of Rana Ghorayeb as Executive Vice-President and Head of Real Estate:

CDPQ today announced the appointment of Rana Ghorayeb as Executive Vice-President and Head of Real Estate. In her new role, she will be responsible for leading the overall Ivanhoé Cambridge portfolio and investment team, which has assets of over $77 billion.

Rana Ghorayeb has served as President and Chief Executive Officer of Otéra Capital, a CDPQ subsidiary specialized in real estate lending, for nearly five years. Before joining CDPQ in 2012, Rana Ghorayeb already had an impressive track record in real estate in renowned institutions. She served as Vice-President of Acquisitions at JP Morgan Asset Management in London, England, where she was in charge of real estate investments in several European countries. Previously, she worked in New York, where she led real estate transactions as Senior Partner at TIAA, a major U.S. pension fund.

"Rana's career at CDPQ has been remarkable, first as Senior Vice-President in the Infrastructure team, where she forged partnerships and carried out investments across the globe that continue to benefit CDPQ. Then, as President and Chief Executive Officer of Otéra, where she distinguished herself as a leader. She successfully led the organization's profound transformation since joining five years ago, and headed the portfolio's growth and diversification strategy, which has made Otéra a major player in North America," said Charles Emond, President and Chief Executive Officer of CDPQ. "With over 25 years of experience in investing, including 20 years in real estate, both locally and internationally, Rana has a real passion for projects and assets that have a positive impact on people's lives. Her appointment to head the Ivanhoé Cambridge portfolio will enable her to combine her extensive investment knowledge with her top-tier managerial skills."

"I began working at CDPQ 12 years ago, and my attachment and my commitment to our organization have only grown stronger since then. I'm very pleased to be taking on this new role, which goes straight to the heart of what motivates me the most: projects that are anchored in people's day-to-day lives and built on creating and maintaining sustainable partnerships," said Rana Ghorayeb. "The real estate sector is facing big challenges, but Nathalie Palladitcheff and her team have transformed the portfolio to be better positioned for the future. Along with the Ivanhoé Cambridge team, I am delighted to be able to contribute to the next chapter at this pivotal moment for the industry, knowing that we have the key strengths to come out ahead. I would also like to thank all my current Otéra Capital teams, whose commitment and high-quality work drove our results and growth over the last five years."

Ivanhoé Cambridge's activities are currently being integrated, and as of April 29, 2024, this team will become an investment group within CDPQ. Rana Ghorayeb will start in her new position on the same date, and will report to the President and Chief Executive Officer of CDPQ. The appointment of Rana Ghorayeb follows the announcement that Nathalie Palladitcheff, who will remain in her position until the end of the gradual transition period, is leaving at the end of April.

"Over the last five years, Nathalie has achieved a great deal, with conviction and courage, to transform Ivanhoé Cambridge despite an extremely challenging real estate environment. I would like to sincerely thank her as she continues to work towards the harmonious integration of the real estate activities and teams into CDPQ, with all the empathy and diplomacy she is known for," concluded Charles Emond.

ABOUT CDPQ

At CDPQ, we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public pension and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at December 31, 2023, CDPQ's net assets totalled CAD 434 billion. For more information, visit cdpq.com, consult our LinkedIn or Instagram pages, or follow us on X.

Let me begin with what I wrote on LinkedIn this afternoon when the news broke out:

Charles Emond nominated Rana Ghorayeb as the new EVP and Head of Real Estate. I'm not surprised as she has a stellar reputation within and outside the organization. As the integration of Ivanhoé Cambridge and Otera Capital employees within Caisse de dépôt et placement du Québec (CDPQ) continues, this nomination was needed and will help ensure solid leadership covering all real estate activities. Wish her all the best and see this as a positive development for employees, depositors and strategic partners.

Why am I not surprised? One of my friends who previously worked at CDPQ Infra and worked alongside her told me she's an excellent leader who is well liked and very competent.

And my friend doesn't give out compliments very easily (he also liked Michael Sabia, Macky Tall and his former boss Jean-Marc Arbaud who heads up REM, says they're all very competent professionals).

Others have also spoken highly to me about Rana who is now assuming a big role as Otéra Capital and Ivanhoé Cambridge get integrated into CDPQ (Ivanhoé will keep its brand name).

As the press release states, she will be responsible for leading the overall Ivanhoé Cambridge portfolio and investment team, which has assets of over $77 billion.

That's a big part of CDPQ's overall portfolio and the good news is outgoing Ivanhoé Cambridge CEO Nathalie Palladitcheff who recently shared her last assessment did a great job with her team to restructure and reposition that massive portfolio over the last five years.

In the press release both Charles Emond and Rana Ghorayeb acknowledged this with the latter stating: 

 "The real estate sector is facing big challenges, but Nathalie Palladitcheff and her team have transformed the portfolio to be better positioned for the future. Along with the Ivanhoé Cambridge team, I am delighted to be able to contribute to the next chapter at this pivotal moment for the industry, knowing that we have the key strengths to come out ahead. I would also like to thank all my current Otéra Capital teams, whose commitment and high-quality work drove our results and growth over the last five years."

Real estate is a hell of an asset class! When I first joined PSP back in 2003, there was no head of real estate and Gordon Fyfe subsequently hired André Collin soon after from Cadim where he served as President and Chief Operating Officer. 

At Cadim, he was responsible for over $20 billion in commercial real estate assets under management in debt and equity products on public and private markets around the world. He was also responsible for overseeing the Caisse's Real Estate Group’s international development and management. 

Anyway, at PSP, André's office was next to mine initially and we had several chats on real estate where he kept touting it as the best asset class since sliced cheese, delivering the "highest risk-adjusted returns for a decade at the Caisse" (probably did back then).

The guy is great opportunistic real estate investor but a ruthless real estate shark, and he made off like a bandit leaving PSP in 2007 and joining John Grayken's prestigious Lone Star Funds where he's still working as President, Commercial Real Estate Funds (his net worth is now in the hundreds of millions).

Anyway, it's a great fit for him and have to give him credit for lasting so long under Grayken who's probably the most demanding boss in real estate (and one of the best real estate investors in the world).

Collin also hired Neil Cunningham, PSP's former CEO, who is actually a very decent and smart guy, now advising Sagard as a member of the board of EverWest Real Estate Investors.

Where am I going with all this? Oh yeah, real estate, it sure isn't what is used to be in a post-pandemic world and some sectors are reeling harder than others but the rise in rates has hurt the asset class across the board.

The environment in real estate is extremely challenging and if inflation reemerges and growth slows, it will remain extremely challenging for a lot longer:

Indeed, I certainly hope inflation expectations don't boomerang back in the second half of the year because that will spell big trouble for the Fed and clobber most assets, especially bonds and real estate.

Of course, if that happens, Grayken, Collin and the rest of the real estate vultures all over the world will be busy picking up distressed properties for pennies on the dollar but competition will be fierce as there's a lot of dry powder out there.

I know, Blackstone's Jon Gray and Brookfield's Bruce Flatt are out full force saying better days lie ahead for real estate but I'm not feeling as confident as they are (see interviews below).

Anyways, this is going to be a challenging environment, especially if stagflation sets in, and I think it's good that Rana took the helm of CDPQ's real estate activities because now is the time to regroup and focus on delivering value add along with their strategic partners all over the world.

Keep in mind, she is already a member of CDPQ's executive committee and as this La Presse interview highlights, she had her share of challenges at Otéra Capital (translated from French):

At Otéra Capital, the difficulties to overcome were going to be numerous. “When I arrived in my position almost four years ago, I immediately understood that I was going to have to deal with a serious breakdown in trust from both the team and the customers,” she says. “Then, shortly after, it was the arrival of COVID-19 which forced us to send everyone home and organize teleworking, not to mention the labor shortage that the pandemic would create. cause,” she adds.

In less than four years under her leadership, Otéra Capital's staff grew from 110 to 169 employees, and the loan portfolio increased by 43%. The opening of an office in New York now offers better diversification and has helped capture good business opportunities both there and here. Loans in the United States now represent 25% of loans granted compared to 5% four years ago. The firm has also adopted a strategy targeting the Quebec economy, and commitments already amount to nearly $6 billion, explains the president.

She adds that she inherited a solid team that was already performing well. The important thing for her was to revitalize the structure and take the team further. Rana Ghorayeb is delighted with the atmosphere that now reigns in the office.

Ms. Ghorayeb sits on the CHUM Foundation, as well as on the board of governors of Concordia University, where she obtained a master's degree in engineering and a bachelor's degree in urban planning. She also holds a master's degree in finance from New York University.

She's highly educated, multilingual (Lebanese descent), very accomplished but what impressed me the most is what she told that reporter:

"Four years ago, the people I passed in the corridors had their heads down and looked at the ground. Today, they are all walking with their heads held high, smiling and happy with what we have achieved together."

Great leaders motivate their troops in good and especially bad times, that's either a trait you possess or don't (very few have this ability to inspire especially when a storm hits).

Alright, let me wrap it up, my head is about to explode with all the back and forth following my last comment on why Canada's pensions need to be part of the solution (see extended update at the end of that post)

Let's just say I sympathize with that famous Al Pacino line: "Just when I thought I was out, they pull me back in."

Below, a recent and older interview with Rana Ghorayeb, CDPQ's new Executive Vice-President and Head of Real Estate.

I also embedded the latest interviews with Blackstone's Jon Gray and Brookfield's Bruce Flatt discussing trends in commercial real estate. 

I hope these two real estate titans are right and better days lie ahead, I remain very cautious and very focused on the macro environment and what can go wrong if inflation expectations pick up.

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