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Could you tell me about the history of the Walton Group of Companies?
DOHERTY: Walton is a family-owned and operated company. It was founded in 1979 by my mother Maureen and my father Patrick in Calgary, Alberta, Canada. This is our 40th anniversary. I was only 10 years old at the time, but my parents focus was on the real estate industry.
My dad had been in the real estate business since the late 1950s. My parents chose to focus on buying land in the path of development. Our humble beginnings began in Calgary acquiring small pieces of land which we held onto by raising capital through individual retail investors.
It started off with family and friends, with small portions of property around the city limits of Calgary, and the idea behind it was to wait until development approached our property and we would look to sell those properties off to third-party builders and developers.
Today, forty years ahead, we manage approximately 105,000 acres of land, with approximately 20,000 acres located in Alberta and Ontario Canada with the balance located in the southern smile of the United States. The 105 acres of land equates to approximately $3.8 billion in assets under management.
We have operations around the globe. Our head office is in Calgary, Alberta. Our US headquarters is in Scottsdale, Arizona, with offices in Dallas, Texas and Washington DC. Of course we have operations in Hong Kong, Singapore, Guangzhou, Beijing, and Shanghai.
Most recently, in the last few months, we opened operations in Dubai. To be clear, the operations outside the borders of the United States and Canada are utilised to raised capital to invest into real estate in both Canada and the United States.
We’ve also brought, in the Walton Group of companies, best-in-class engineers and planners to help us with the rezoning of our properties to get them to the highest invest use so we can do one of two things—either sell our properties to third parties, or partner with third parties whereby we contribute the land and they contribute their expertise on building and developing and we develop the properties together bringing revenue and cashflow back to our investment groups.
CPI Financial's William Mullally sits down with Bill Doherty, CEO, Walton Global Investments and Tim Haywood, General Manager, Regional Vice President, Walton International Group to speak about the group’s expanded presence in the GCC
How did your international journey lead to you opening an office in Dubai?
DOHERTY: On a personal basis, I moved out to Hong Kong when I was 22 years old to help establish and build up our operations in Hong Kong, Singapore, Southeast Asia and Japan. We were fortunate enough to be able to attract people to come in and work within the Walton Group of companies in these regional offices in Asia, one of them being Tim Haywood, the gentleman who is heading up our operation in Dubai.
Tim has been with Walton for 12 and a half years, and if you go to our office in Hong Kong and Singapore, the average tenure of our employees is 12 to 15 years. Some people in our Hong Kong office have been working with us from the day we opened up the office.
That continuity of not only our operations but with the same people who have grown with our company have helped us to create strong relations with the independent financial advisory markets, individual investors, and institutional partners alike.
TIM HAYWOOD: In terms of our distribution model, it is focused on our partnerships with wealth management groups in and around Hong Kong, Asia, and of course here in the Middle East.
The mindset of opening up an operation here is that I was travelling to Dubai on a regular basis to service our business partners, investors, and wealth management partners, and it was clear that they needed more attention, and it made sense to open up operations here and be able to service them on the ground.
The opportunity here is to expand through the GCC region in terms of our offerings, our business partnerships and our relationships into the different markets through wealth management groups, family offices, some of the banking institutions, and that’s what we’re planning to do, which suits the product line that we’re evolving at this moment in time.
What distinguishes the investors in the region? Is there a character to the region that you’ve recognized?
TIM HAYWOOD: There’s two components for us really. There’s the bread and butter clientele through wealth management groups which are typically retail investors, but our product as it stands is a Shari’ah-compliant asset. For this region in particular that is an interesting proposition, particularly in Saudi Arabia.
We see that as a really good starting point, and from there it’s about looking at other opportunities in terms of our own product line which can address different needs in the different demographics we operate in in terms of clientele, which should be an exciting opportunity for us.
What were the conversations that led to achieving Shari’ah-compliance?
DOHERTY: We’d been discussing it for quite a while, so doing business out of our Singapore office for Malaysia and Indonesia, we began discussing it 7-8 years ago, and put it into action 3-4 years ago, gaining approval about three years ago.
That was for our pre-development land product, which is the cornerstone of the Walton Group of companies. We are going to be introducing another product to the marketplace within the next 60 days which we are going to work immediately in an effort to achieve Shari’ah compliance as well, which will be a cash-flowing product, an incometype product, that will be tied to a Fortune 500 company in the United States.
Could you tell me more about that project?
DOHERTY: We are launching our first fund of this product in the United States in October, which is called the BOLD Fund, the Builder Auction Land Development Fund. With this, we work with national publicly-traded builders in the United States where they have assets they are looking to acquire, and instead of them acquiring those assets, we purchase the assets ourselves.
We have an agreement in place where they will take down those assets phase by phase or by lot over a specified period of time. The first fund is $100 million in size, it is an eight-year fund, and we expect to initiate cashflow within nine to 15 months.
This first fund is tied to America’s number one home builder in terms of volume, DR Horton, a Fortune 500 company, $14.5 billion in revenues, investment grade paper. They will be our primary partner for this fund and for funds going forward.
I have recently met with investment bankers in Europe to create a fund to be distributed in Europe and we’re looking to do the exact same thing in the Middle East. HAYWOOD: The focus will be professional investor status, so it will have a limit as tow ho it can go out to, which is where the family offices, the banking division and the high net worth clients who meet that criteria will be able to access that.
How has real estate landscape changed in the last 10 years?
DOHERTY: The regulatory thresholds are higher than they were 10 years ago, and that’s a good thing. It makes us all better at what we have to do. The amount of capital that is available on a global basis has increased significantly from our perspective, and it’s a much more competitive landscape on a global basis.
I would say 10 years ago a company like ours that specialises in a certain asset class was one of only a few in Southeast Asia and Japan offering our products, and now there are many companies like ours offering all sorts of products from all corners of the world to all these different markets.
How do investors navigate that changed landscape?
DOHERTY: The amount of opportunities obviously have increased, but with that increase of opportunity and choice, I would propose that an individual will want to work with a financial advisor with a good strong history and an issuer such as the Walton Group of Companies that has a long history and a track record of delivering returns. We are already successful, and we believe we will continue to be successful.