LOS ANGELES-Profit Investments, a public equity investment firm based in Washington D.C., is launching a Los Angeles-based real estate investment emerging manager, as reported in an earlier GlobeSt.com story. Troy Jenkins, who formerly spent more than a decade at CBRE Global Investments, was plucked to lead the new venture as managing director. GlobeSt.com sat down with Jenkins to discuss Profit Investments' debut real estate venture, the role of emerging managers and his goals for the group.  

GlobeSt.com: Why is Profit Investments venturing into real estate?

Troy Jenkins: The answer there lies in the provision of service to the pension fund and the institutional investment community, where, as you can imagine, many members of the community are budget conscious and are doing the best they can to service their constituents with limited resources. Profit Investments has the benefit of a 15-year track record, the reputation for timely and accurate reporting, and entering the real estate community is a very natural add-on to an existing platform.

GlobeSt.com: Why did Profit Investments choose to base their real estate endeavor in Los Angeles?

Jenkins: They service clients on the east coast and on the west coast, so this will give a more direct, a more personal and a greater proximity to those west coast based limited partners and pension funds that are existing clients of Profit Investments. Also, because my career has been on the west coast, I can tap into the west coast base. On the personal side, Eugene Profit [the founder of Profit Investments] and I are friends. He and I went to college together and know each other's spouses. He gave me the opportunity to keep my family here rather than uprooting them and moving them to Washington D.C. So, I feel really blessed to work with a company that is as established as Profit Investments and also with a friend that recognizes the personal aspect of my career and my family.

GlobeSt.com: Were there any market trends behind the decision to base the group in Los Angeles?

Jenkins: Based on what we see in the emerging and recovering US economy, some of the best ways to capitalize on that increase in income are right here in California. Also, much of my career has been west coast-based.

GlobeSt.com: What is the role of an emerging manager?

Jenkins: The term means different things to different people, and it has different levels of effectiveness pension fund by pension fund. I think the overwhelming scheme of emerging managers is giving the pension fund community the opportunity to capitalize on investment opportunities that are sourced by and managed by smaller firms. The idea is that a smaller firm is a bit more nimble when it comes to investment strategy and can give more attention to a medium- to small-sized transaction. It is really squeezing as much juice out of the firm as you can. At the same time, there is a social component to the emerging manager initiatives, and that is the idea of inclusion. As you can imagine, the investment community tends to be dominated by a short list of major investment institutions and many times that is a locked door to women and minorities. Now, that isn't always the case in California because the emerging manager program in California can not designate by gender or by race by law; however, the theme remains that the State of California wants to have more investment lines to find opportunities rather than fewer.

GlobeSt.com: What role will you play in this group?

Jenkins: The role as leader of the real estate group is truly all encompassing. It starts with dividing the investment strategy. We will raise the core plus fund of approximately $150 million of equity for the purpose of acquiring office, industrial, retail and multifamily properties across managed states. Obviously Los Angeles and the state of California are critical to the development of that portfolio. Number two is capital raising. I am really presenting an investment strategy to Profit Investments affecting the client base and also to the relationships that I have established in the industry over the past 21 years. Once we are able to acquire some properties, we can maybe get the staff up and lean on some of the relationships I've built in the investment community to hire some talent.