Investment Process

Castleforge’s investment process is a fully integrated and
cohesive process involving a broad range of team member input,
from initial sourcing to the exit of the investment.

Sourcing

If assumptions or market data change, limiting our ability to invest in accordance with a given theme, we may choose to update the theme accordingly or transition to another investment theme that it is tracking.

Castleforge prefers to invest thematically, and therefore we source investments both along thematic lines and opportunistically.

Investment themes are developed and shaped by our internal research function, which incorporates detailed upfront analysis and a range of data sources including market data and real-time operational data from weekly discussions about our investment portfolio. This allows our us to constantly test and refine its themes to ensure that the underlying assumptions are accurate and that market data continues to support the investment theme.

Selection

The key components of the Castleforge investment selection process are three weekly meetings:

  • The Monday Management Meeting (“MMM”);
  • The Monday Strategy Meeting (“MSM”); and
  • The Wednesday Review Meeting (“WRM”). During  the MMM, the entire team discusses all current  investments and a subset of potential acquisitions.

This allows the team to incorporate real-time market data—for example, construction costs and leasing—into investment assumptions and investment themes. The MSM occurs after the MMM and comprises the Strategy Committee, which discuss key management decisions and investment activity. Lastly, during the WRM a select number of potential acquisitions that have been modelled are presented to and reviewed by the Strategy Committee.

Diligence
and Execution

Investments that have been approved by the Strategy Committee are pursued and an offer is likely then made to the vendor.

If the offer is accepted, Castleforge typically enters into an exclusivity arrangement with the vendor which allows for a set time to engage in detailed technical and legal diligence.

The Intention is for assets to be held by the Fund over the medium to long term.

We will however consider early realisations to avoid unforeseen risks (such as downturns in a particular market) or to take advantage of unexpected accelerated realisation opportunities. We judge each potential sale independently, weighing macroeconomic, broad market and local submarket rends, unsolicited offers that may represent upside to the business plan or any possible additional returns that can be capitalised on.

Development

Asset
Management

‘As a group we are highly skilled and knowledgeable about real estate; from running income producing assets right through the development cycle, and have worked at a variety of companies before coming together at Castleforge. We therefore understand what works and what doesn’t and where we can press into new and exciting areas to deliver performance. The approach to building out operational platforms to work with the physical real estate is genuinely interesting an exciting to be a part of, and clear indication of the forward thinking nature of the business.’

Castleforge directly manages each asset it acquires and ensures that individuals involved in the acquisition remain involved throughout the project’s life.

We appoint an internal transaction team to each asset, combining specialist skillsets to achieve its business plan targets.

The transaction team for each project involves representation across several business areas including, asset management, leasing, legal and transactional execution functions.

Each of these functions regularly feeds information to the research and strategy function both through informal regular dialogue and through formal weekly meetings.

Reporting
and Valuations

Castleforge maintains a rigorous monitoring and reporting process for all its investments, combining internal review with external oversight.