Institutional Investor's Alpha Magazine - December 2007/January 2008 - (Page 31)

Interview George Rizk Management By Frances Denmark Rizk W hat do a Trump hotel project in Hawaii, a pre-IPO investment in a Beijing-based property company and the purchase of a 57,000-acre swath of New Mexico have in common? They are just three of the 20 deals George Rizk has closed in his ﬁrst 20 months as head of real estate at $34 billion New York–based alternative investment ﬁrm D.E. Shaw Group. Hedge fund ﬁrms interested in establishing real estate practices began looking a few years ago for people with extensive industry experience. Rizk, having already made the leap from traditional to alternative investment ﬁrm — he began his career in Merrill Lynch & Co.’s real estate practice in 1994 and later moved to New York private equity shop Cerberus Capital Management — was often their ﬁrst call. But in interview after interview, he found himself performing ad hoc consulting and grew frustrated. “It was clear they had no idea what it would take to set up a platform to invest in real estate,” says Rizk, 37, a native Canadian, who took to carting along a ﬁve-page memo outlining the arduous tax and regulatory requirements involved. So when D.E. Shaw came calling in 2005, it took a headhunter to convince him that things would be different there. They were. At the outset of his ﬁrst meeting with his future employer, Rizk motioned to his tax memo. In a countermove, his interviewer pointed to a thick binder containing the results of a yearlong study D.E. Shaw had conducted on the real estate industry. Taken aback by such extensive preparation, Rizk was even more surprised to learn that D.E. Shaw had already established a real estate investment platform and As head of D.E. Shaw’s was simply looking for newly created real estate someone to run it. A year later he was comunit, George Rizk is pleting his ﬁrst deal for the ﬁrm — a joint partnership leading the charge into agreement between D.E. Shaw a nd New York– global property investing based firms Hypo Real as part of an effort to Estate Capital Corp. and Dune Real Estate Funds diversify the hedge fund to provide a $442 million loan for construction of ﬁrm’s portfolio. the Trump International Hotel and Tower at Waikiki Beach Walk in Honolulu. Since he’s taken the helm of D.E. Shaw’s real estate operation, which now boasts 14 members, his group has been investing aggressively. Its portfolio totals $1.4 billion. Given the current state of the U.S. real estate market and the toll that the subprime crisis has taken — from the closure of two high-proﬁle hedge funds at Bear, Stearns & Co., to the ouster of chief executives at Citigroup, Mer- DECEMBER 2007/JANUARY 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 31

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - December 2007/January 2008

Institutional Investor's Alpha Magazine - December 2007/January 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Liberal Returns The Good Guy: Inner-city MVP Cover Story: Marathon Men Interview: Rizk Management Profile: Living on Hostile Ground Profile: Buy and Hold In Theory: The Fallacy of Portable Alpha Strategies: Changing Course Alpha Bytes: Behind the Scenes Unhedged: Commentary: An Activist Alternative

Institutional Investor's Alpha Magazine - December 2007/January 2008

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