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Cantor to Buy Ranieri-Owned Distressed Assets Manager

Commercial Mortgage Unit Adds to Howard Lutnick's Fast-Growing CRE Investment Management Platform
August 7, 2014
The real estate subsidiary of investment bank Cantor Fitzgerald LP has struck a deal to acquire a commercial real estate investment management firm owned by mortgage securitization pioneer Louis S. Ranieri.

Cantor Real Estate, L.P. will acquire RREP Recovery Partners Manager LLC, a commercial real estate investment manager with about $200 million in assets under management. RREP Recovery Partners, led by veteran investment bankers Jon Vaccaro and Eric Schwartz, is part of Ranieri Real Estate Partners LP.

Terms of the deal were not disclosed. Schwartz and Vaccaro will report to Howard W. Lutnick, chairman and CEO of Cantor Fitzgerald, L.P., which has 8,000 employees over 125 locations around the world. Lutnick is also CEO and founder of financial services firm BGC Partners, which owns commercial real estate brokerage firm Newmark Grubb Knight Frank (NGKF).

Ranieri cofounded Ranieri Real Estate Partners with Vaccaro and Schwartz, who left Frankfurt-based Deutsche Bank in 2010. Vaccaro was global head of CRE for the German bank and Schwartz headed its North America CRE operations.

They formed the RREP Recovery Partners fund in 2011 to invest in distressed loans backed by assets across all property types, offering pension plans, money managers and other clients such services as loan modifications, restructuring, special servicing and other distressed asset resolution options. The firm will continue to acquire distressed assets from financial institutions, owners and operators, as well as originate subordinate debt and source equity investment opportunities.

"Cantor is fully committed to growing our presence throughout the real estate industry," Lutnick said in a statement. "We are confident that RREP Recovery Partners' highly respected team will complement our seasoned management and strengthen our rapidly growing real estate investment management platform."

Vaccaro noted that Cantor's real estate platform "has depth and breadth that enhances our capabilities, and will enable us to deliver new investment products to our investors."

Ranieri Partners Chair Lew Ranieri, a former bond trader, vice chairman with Salomon Brothers in the 1980s -- and early adopter in the creation and sale of mortgage-backed securities (MBS) -- noted that his team built RREP Recovery Partners around the dislocation during the banking crisis, and now that that chapter has passed, he called the transition to a larger scale platform like Cantor's a "natural evolution."

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