GlobeSt.com: What's the geographic spread of your investor clientele?

Quille: In the existing fund we have quite a global spread. About 40% are US, 10% Canadian, and Middle Eastern and Australian investors make up another 40%. The balance is European.

GlobeSt.com: What are your US targets for 2004?

Quille: We won't invest in the states at all but focus in Europe and Asia. With the global fund we have the mandate to invest in the US but such a large portion of our capital came from US pension funds, and they're more anxious to see us invest offshore. They already have their domestic exposure, and frankly over the last four years, on a risk-adjusted basis, we've seen better opportunities in Europe and Asia than in the US. This also is a point of differentiation, particularly when we talk to US-based pension funds, endowments and insurance companies.

GlobeSt.com: So what are your targets in Asia and Europe?

Quille: We're fully invested with our existing fund, and we'll be raising the next shortly, but this year is more about delivering on the existing investments. Our current spread of investments is roughly 80% European and 20% Asian, but as in the US, there's a lot of money chasing not too many deals in Europe, so we'll probably be selling in the UK, Belgium and Spain and investing in Japan and Korea particularly, and in those markets primarily in office and residential sectors.

GlobeSt.com: What about hotels or industrial?

Quille: We'll invest in any form of real estate, but we'll buy a hotel only if we can buy it at 50 cents on the dollar, and those we've seen have been fully priced. In terms of industrial, Asian governments watch the occupancy cost that foreign nationals have to pay, and if they see prices become non-competitive they release more land. As a result, the sector has a high degree of government interference and we tend to stay away from it. It really doesn't follow the true supply/demand characteristics opportunistic investors seek.

GlobeSt.com: So what sort of office properties do you go after?

Quille: We always look to add value. Fledgling REITs in Korea and Japan generally don't like to take leasing or redevelopment risk, so we look for properties where we can take that risk and sell those assets either to local institutions or REITs that want stabilized income. That's the twist we look for.

GlobeSt.com: Are you a long-term holder or do you flip as necessary?

Quille: We flip as necessary. When you look for higher returns, the velocity of capital is very important. A five-year investment is a long-term investment from our perspective. Most of the assets in our portfolio to date have been there only for 18 months to two years, but there are exceptions. Within our European portfolio, there are two operating companies we bought--one based in the UK and the other in Belgium. Those are long-term holds from our perspective--six or seven years--because we're building those businesses.

GlobeSt.com: Do you see a time when you might invest in the US?

Quille: Well, you never say never, but we don't have resources there, and one of our founding principles is that we invest only where we've been on the ground for reasonable periods of time. So if we go to the US it will be after we've established those resources or formed an alliance with someone else, much like Macquarie did.

GlobeSt.com: So what will the partnership look like in a year?

Quille: Obviously, we're still working the existing fund fairly hard and sometime in the future we hope to launch the second fund--which should be similar to past funds in terms of size--and investing that. Also, we have a number of large institutions that have been going offshore for some time via funds and they feel like they want to be doing a little bit for themselves. We've been in discussions with a couple of these, and we may do some sort of special-account investing for them, particularly in Tokyo.