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Kennedy Wilson investment


rogermunibond
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BEVERLY HILLS, Calif.--(BUSINESS WIRE)--International commercial real estate investment and services company Kennedy Wilson (NYSE: KW) today announced that it entered into a stock purchase agreement with Toronto based Fairfax Financial Holdings Limited (TSX: FFH) (TSX: FFH.U) (“Fairfax”) for a commitment by Fairfax to purchase up to $100 million of Kennedy Wilson convertible preferred stock. The private placement creates a new strategic relationship between Kennedy Wilson and Fairfax, which has a market cap of approximately $8 billion and total investment portfolio of approximately $20 billion.

 

“This is the single greatest event in Kennedy Wilson’s history thus far,” said William McMorrow, chairman and CEO of Kennedy Wilson. “We feel very fortunate to begin this relationship with Prem Watsa, chairman and CEO of Fairfax, and the rest of the extremely talented Fairfax team. Not only does Fairfax bring an extremely strong balance sheet and investing track record but, more importantly, our companies share the same long-term, value investing philosophies and were both built from the ground up.”

 

Kennedy Wilson was originally established as an auction house and purchased in 1988 by a group led by Mr. McMorrow, who expanded the company into a full service commercial real estate investment and services company with an international presence. Fairfax was transformed by Mr. Watsa and his partners from a small specialist in trucking insurance 25 years ago to become one of the world’s premier insurance and reinsurance and investment companies.

 

Mr. Watsa, chairman and CEO of Fairfax, commented, “With our long-term focus and value investing philosophy, we believe that this is the right time for Fairfax to begin selectively participating in commercial real estate opportunities, particularly in California, with the highly talented team at Kennedy Wilson.” Kennedy Wilson has taken advantage of the current distress in the real estate market with purchases of note pools and hard assets totaling over $600 million since December of last year.

 

The preferred equity investment by Fairfax carries a dividend of 6% per year and has a mandatory conversion into Kennedy Wilson common stock by May 2015 at $12.41 per share.

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I guess great minds think alike. From Seth Klarman's talk at the CFA institute today:

 

One area Klarman said he is currently scouring for potential investments is private commercial real estate below the top quality. Publicly traded real estate investment trusts, however, have "rallied enormously" and are "quite unattractive," he said.

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  • 2 weeks later...

http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20100527006538&newsLang=en

 

Kennedy Wilson Announces Plan for up to $250M Investment Partnership with Fairfax Financial

 

Fairfax and Kennedy Wilson Team up to Acquire Commercial Real Estate Assets with a Focus in California

 

BEVERLY HILLS, Calif.--(BUSINESS WIRE)--International real estate investment and services company Kennedy Wilson (NYSE: KW) today announced the planned formation of a new partnership with Fairfax Financial Holdings Limited (TSX: FFH) (TSX: FFH.U) (“Fairfax”) to pursue acquisitions of commercial real estate assets, including purchasing loans and real property. Fairfax will provide up to a $250 million capital commitment. This news follows the recent announcement of Fairfax’s purchase of up to $100 million of Kennedy Wilson convertible preferred stock.

 

“Fairfax is such a well respected company with an extraordinary reputation worldwide.”

“We are extremely pleased about working with Fairfax on both the corporate level and deal level,” said William McMorrow, chairman and CEO of Kennedy Wilson. “Fairfax is such a well respected company with an extraordinary reputation worldwide.”

 

Kennedy Wilson will lead the sourcing and negotiation of investment opportunities in addition to holding key responsibility for due diligence, financing, property management, asset management and disposition.

 

Chairman and CEO of Fairfax, Prem Watsa, commented, “Kennedy Wilson’s strong investment track record and exceptional ability to source, manage and sell properties, make them a unique partner and an excellent choice for Fairfax in pursuing current value in the commercial real estate sector, particularly in California.”

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