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Hedge Fund Spins Out Real Estate Investment Business Into Separate Private Equity Firm

Cross Lake Partners Launched as Separate Firm from Paulson & Co. with $1 Billion in Assets Under Management
July 5, 2018
Under Paulson, the investment team has made a wide range of real estate investments, including this property in Oceanside, California

Paulson & Co., the Wall Street investment management firm best known for betting against the subprime mortgage market in 2007 and earning spectacular returns for its investors, has spun-out its real estate private equity operations as a separate company called Cross Lake Partners LLC.

Led by Managing Partners Michael Barr and Jonathan Shumaker, the Cross Lake real estate team will continue to manage the real estate portfolios of two existing funds on behalf of institutional investors. The new real estate private equity firm has approximately $1 billion in assets under management.

John Paulson, president of Paulson & Co., will continue to be an investor in the real estate funds.

Prior to forming Cross Lake, Barr and Shumaker sourced, structured and executed a wide range of real estate transactions, including single assets, portfolios and entity-level investments.

The team has made investments in Extended Stay Hotels, CNL Resorts, William Lyon Homes, Tishman Hotels, Gables Residential and the assemblage of a residential land portfolio totaling 35,000 lots.

For the last six years through this past May, Barr had served as a director for William Lyons Homes. In November 2017, an affiliate of William Lyons and Paulson acquired a site in Oceanside, California, (San Diego County) for a proposed residential homebuilding development for $22.8 million.

In addition, the Paulson team owns development sites in the Denver, Phoenix and Las Vegas markets, according to CoStar data. This past March, the team sold a 19-acre, developable parcel in Gilbert, Arizona, for $8 million.

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