“There were managers who were literally sitting across the table throwing their keys at you. They had overbuilt their properties and had no intention of repaying their loans,” Holland says. “You walked away with respect for high-quality companies.”
Holland’s acquired admiration of top-notch leadership has carried over into her investment strategy today. Her funds place a premium on identifying REITs that are run by experienced managers “whose interests are closely aligned with investors.” Holland and her staff must first meet face-to-face with a company’s managers before they decide whether or not to purchase shares.
In addition, ABN AMRO’s global property analysts develop a “quality-and-risk scorecard” to help evaluate an investment target, incorporating factors like transparency, treatment of minority shareholders and insider ownership. A company has to meet a threshold score in order to be considered as a potential investment. “Integrity of management is a big piece of that,” Holland says.
“Good, high-quality management teams will continue to add value over time. They continue to work through bad times, rather than just throw their hands up,” she says.
Holland manages both the Aston/ABN AMRO Global Real Estate Fund and the Aston/ABN AMRO Real Estate Fund. The latter fund, which was launched near the end of 1997, focuses on “local property markets with a preference for locally dominant players,” and it seeks to mimic direct property investments combined with the benefits of real estate securities. The goal is to produce
a “total” return through a combination of growth and income.
The fund concentrates on local markets, seeking out the dominant companies in those areas. Its largest holdings include Simon Property Group (NYSE: SPG), Vornado Realty Trust (NYSE: VNO) and SL Green Realty Corporation (NYSE: SLG). At the end of July 2007, the retail, office and residential sectors constituted the funds’ three largest areas of investment.
Frequent Flier
While Holland’s background primarily consists of experience in domestic real estate, she says her new attention to global markets has invigorated her appreciation for her work.
Holland started working her way up the real estate ranks after earning her accounting degree from Saint Louis University. In her first position out of school, Holland worked as a consultant in the accounting firm of Laventhol & Horwath, advising clients on lodging and healthcare property projects. “That’s where I got the real estate bug,” she says.
She later moved on to national mall developer and operator CenterMark Properties, focusing on project development. She then made the transition to real estate securities when she accepted a position as a REIT analyst with Edward Jones. Holland joined ABN in 1997 as senior portfolio manager of the company’s North American real estate group, and she was promoted to lead the entire global property division in 2005.
Although she denies that the real estate investment profession has seen significant changes during her career, today her focus has obviously shifted to new frontiers abroad. Now, Holland says, she relishes watching emerging markets grow and flourish.
“I’m on the phone with Europe in the morning, and I’m on the phone with Asia in the evening,” she says. “I watch real estate markets evolve all around the world.”
The requisite travel is also a nice perk for an avid scuba diver—Fiji is Holland’s current destination of choice. Despite all of her travel, however, Holland is an active member of multiple real estate investment trade groups, including serving on NAREIT’s Investors Advisory Council. She also finds time to work in her garden back home in St. Louis.
The Smartest People in the Room
Holland deflects any recognition for her group’s performance to the people around her. She measures her successes in the quality of the staff picking her funds’ investments, not the money that those decisions produce.
“I believe in hiring people who are smarter than you,” Holland says. “I am incredibly proud of the people who I work with everyday, and I wouldn’t be here if not for them.”
Holland constantly refers to the “team concept” exhibited by the 15 employees in her group. In fact, even with U.S. REITs mired in their recent downturn and a potentially overwhelming flood of intriguing opportunities abroad, Holland cites keeping her team intact as the biggest challenge that she faces going forward.
Still, after everyone has had a say and the time comes for a decision, there’s no question where Holland and her charges turn. “It is the voice of experience within the team that influences which way we go.”
Editor’s Note: ABN AMRO Asset Management partners with Aston Asset Management to manage the Aston/ABN AMRO Global Real Estate Fund and the Aston/ABN AMRO Real Estate Fund. Both funds are considered part of the Aston fund family. The Global fund was launched in early August and lacked performance data at press time.
