Residential resort development

Published on: "Business File"

Historically, it has been possible to say that a property market is ripe for development when the deal-makers ride into town. It’s not always the case. Sometimes the first movers are the first to go bust because they’ve misjudged the state of readiness.

But more often than not, they are the ones who make the killing by getting in while land is still relatively cheap and who either make a profit and get out once competitors move in or make such a name that they dominate the market in future.

Dolphin Capital Investors is a private equity investment vehicle that has been created by two new-generation, money-savvy MBAs who understand how to take other people’s money and make it work.

They are 33-year-old Miltos Kambourides and 34-year-old Pierre Charalambides, respectively managing partner and partner in Dolphin Capital Investors (DCI), a private equity investment company capitalised at €109 mn. Both men have experience with SREP – Soros Real Estate Partners – the private equity real estate investment vehicle founded by the legendary investment guru George Soros.

That venture took $200mn and parlayed it into a $1 bn investment fund that targeted real estate developments in Western Europe and Japan. While Kambourides was with SREP he was involved largely in projects in the UK but had responsibility for investment strategy in Southeastern Europe. Charalambides worked with Kambourides in an SREP initiative to identify investment opportunities in the region. Before joining the Soros company the two had worked respectively for Goldman Sachs and JP Morgan.

Building upon their contacts, the two founded Dolphin Capital Investors with €5 mn raised in a private placement with institutional investors and a further €104 mn raised through an initial public offering (IPO) on the AIM, the alternative market of the London Stock Exchange. That market is traditionally used by institutional investors looking for higher-risk, higher-return investments for their insurance and mutual fund portfolios that consist in the main of more staid blue chips. DCI says it will only invest in projects with an internal rate of return of at least 25% and that it expects some of its ventures to generate up to 45%.

The investor list claimed by DCI reads like a who’s who of the world’s major asset management companies plus the National Bank of Greece which has taken an 11.5% stake worth €12 mn.

Dolphin Capital Investors is an offshore company registered in the British Virgin Islands. Its board consists of a Cypriot lawyer, a Turkish investment consultant and a Greek American asset manager.

The fund is managed against fees by Dolphin Capital Partners (basically Kambourides and Charalambides) a company based in Athens. Its board includes a vice-president of GE Capital and Constantine Hassabis, founder of J&P Developemtn, which was responsible for development of the award-winning Pitiousa residential complex on the island of Spetses.

The company plans to focus on investments in Greece, Cyprus, Turkey and Croatia. It has identified six projects in Greece and Cyprus in which it proposes to make €66 mn worth of investments. It has identified a further 11 projects – which the prospectus identifies only alphabetically – with investment potential of a further €127 mn. Three are in Greece, four in Cyprus, two in Turkey and two in Croatia. The prospectus said that the company had no legally binding agreements with the developers of any of these projects but expected to reach agreements with at least half of them.

Source: "Business File"