Barry Sternlicht, chairman and chief executive officer of Starwood Capital Group LLC, said he plans to more than triple the firm’s investments in Europe as returns on real estate on the continent are among the highest.
“There is liquidity in Europe,” Sternlicht said today at the Milken Institute Global Conference in Beverly Hills, California. “Debt is coming in unbelievably fast as the world is searching for yield, and now one of the last remaining places for that on Earth is Europe.”
Starwood Capital’s last private fund had about 6 percent of its investments in Europe, and its latest one is poised to have more, Sternlicht said at the conference. The Greenwich, Connecticut-based firm said earlier this month that it raised $4.2 billion for its new fund, with almost $2 billion of equity capital already committed or invested in the U.S. and Europe.
The possibility for social unrest in many European countries struggling with economic downturns may pose a threat to investments on the continent, Sternlicht said. About 80 percent of the new fund is investing in the U.S., which is offering stable returns, he said.
Sternlicht founded Starwood Capital in 1991 after working for Chicago-based JMB Realty Corp. He started Starwood Hotels & Resorts Worldwide Inc. in 1995, and ran the company until 2004, when he stepped down as CEO to become executive chairman. He resigned in 2005 amid a dispute with the board. Starwood Hotels, based in Stamford, Connecticut, is no longer affiliated with Starwood Capital.