Investor Interview: Evolution of a Global Leader

Anne Kavanagh, global head of asset management and transactions for AXA Real Estate, talks about ways to lay a solid academic foundation for a real estate career—and the management lessons she employs today.

Anne Kavanagh is the global head of asset management and transactions for AXA Real Estate, the real estate investment and management business of the AXA Group. AXA Real Estate is the largest real estate portfolio and asset manager in Europe, with $60 billion (€45 billion) of assets under management as of March 2013. It has more than 140 third-party institutional clients around the world, in addition to managing funds for AXA insurance companies. AXA Real Estate employs more than 500 real estate professionals and operates in 22 countries. Kavanagh, who joined AXA Real Estate in 2010, has over 25 years of industry experience and is based in London. Before joining AXA Real Estate, she was managing director of real estate for Lazard; head of real estate, Europe, for Cambridge Place Investment Management; and international director in the European capital markets business for Jones Lang LaSalle. Kavanagh is a ULI trustee.

Related Audio: Hear the Full Interview With Stephen Blank and Anne Kavanagh

You made a choice in the beginning of your career to specialize in real estate. What drove you to that?

I come from a family of academics, and I was about to do a degree in geography when my father and sisters asked, “What are you going to do with a degree in geography?” I said that I was not quite sure, but that there was this area called real estate that I was quite interested in. That led me to switch focus to obtaining a real estate degree. My father assisted by arranging for me to see a couple of people in the real estate industry.

There are twin tracks within real estate in the U.K. You can get a degree either in rural and country or in urban. I did my degree in urban estate and loved it. Actually, it is unfair to say that I loved it. I didn’t love the courses; I thought they were very dull. But I did a year working in the industry and I enjoyed the job. I liked the projects, the variety, and the people. I thought it was fascinating. I loved the impact development had on communities and cities. When I first started working in the early ’80s, you were never in the office. I was out of the office a lot in my first job, inspecting properties and visiting towns and factories. It was an interesting way to connect with the world.

Your C.V. says you are a chartered surveyor. What is a chartered surveyor, and how did that happen?

In the U.K., the standard route if you did a property degree or worked in the real estate industry is to become a chartered surveyor, which—similar to the accreditation method for chartered accountants—was an accreditation by the Royal Institute of Chartered Surveyors.

It was a two-year program—post-university—of continuing professional development. At that time in the industry, having the badge of being a chartered surveyor was seen as being pretty important. For example, I joined the graduate program at Jones Lang Wootton [predecessor to Jones Lang LaSalle] in 1983, and it was their training program that led me to become a chartered surveyor. You had to cover areas such as valuations, construction, and investment. It was a broad discipline approach, and you were not just put into one department that offered a narrow experience. Interestingly enough, that breadth of experience that I had early in my career led in part to my being able to do the role that I am doing today.

Do you see the generation that follows you coming with the same educational background?

Today, there are two sides to property that are meeting in the middle. There is the financial side, the real estate side, and the combination of the two. If I look at graduates within our business, it varies across Europe. In the States, they are all out of the business schools. In France, Germany, or the U.K., it is a mixture from the business schools or straight out of university. It is a very broad mix depending on the traditions in the country and the environment. For instance, in France we get a very high caliber of graduates because AXA is a major international group headquartered in France. In Germany’s real estate industry, it is much more challenging to find the same caliber of students because they often go into industry instead of real estate. In Sweden, the caliber tends to be very high; a lot of them come through the School of Economics.

What would you advise people today regarding the best educational starting point?

I would say to get a good, broad education; I would not specifically advise someone to do a real estate degree. In today’s world, you can expect to have a number of careers in different areas, and as a young person coming into the industry you want to start off with a broad base. So, I would not advise specializing too early. I think a good degree could bring you into real estate supplemented by either a master’s or financial training. When I first came into the industry, depending on what role you were doing, there were a lot of people in real estate who were not financially oriented. I think, now, it is difficult to be successful in the industry without having some financial training and expertise.

So, for someone who has just come out of school with a broad-based degree, where should she or he look for a job? What are the characteristics that make sense for someone’s first foray into real estate?

I think you want to be in a strong training program and to work for good people. I think it is a combination. You could go to a small boutique and work for a really great individual, but usually as a young person you want to work for a number of different people. So my advice would be to go either to one of the REITs or large practices with a strong training program, or to one of the investment managers or architectural practices. I mentor students at Cambridge University coming off the master’s in finance program. Some have a definite bias that they want to go financial, while others have a bias toward public policy or architecture and design. It depends where your interest lies. My key advice to any young person is to do something you enjoy. If you do something you enjoy, typically you will excel at it.

When I graduated and started my first position, I really enjoyed my job, my role, and the people I met. Some of the other people in my peer group took [what on paper were] phenomenal jobs but didn’t enjoy them. I think there is something unique about real estate: you can touch it; you can feel it; it is part of cities and communities. There is a very human connection with real estate that has become an aspect that people like about the industry. It is a very collaborative industry. I think that is a hallmark linking everything we do in real estate. The people dimension is what makes it so enjoyable.

You have been part of some of the classic firms in this industry, starting at Jones Lang Wootton, a large, diversified real estate company; then Cambridge Place, which provided the exposure to a smaller type of company; Lazard, a classic investment bank; and now AXA Real Estate, an institution. Has your career evolved opportunistically, or was each job a natural step in Anne Kavanagh’s route to becoming a global leader?

I didn’t set out on my career planning that this is where I would end up. It has been a natural evolution, and without each job I did before, I would not be able to do the job that I am doing today. For example, my whole grounding started at Jones Lang Wootton in the old partnership. The partnership was a very interesting place to grow up in. You had a number of leaders surrounding you, and there was a very strong mentoring culture.

Some of the partners who mentored me were people who were very influential in the real estate industry. John Stephen, Robin Broadhurst, and Honor Chapman were leaders and great mentors. The leadership element, the quality of people, and the organization you work for are extremely important. My advice to young people today is not to underestimate who you are working for and who you report to; it is so important for how your career develops. My career developed as a result of working for or with terrific individuals who were committed to my success. Later in my career, when I was working internationally, I encountered support from Peter Barge in Asia, Stuart Scott in the United States, and Lynn Thurber, the incoming ULI chairman, when she was CEO of LaSalle.

The merger with LaSalle brought [about] a different dimension when we became a listed company on Wall Street. We had to learn about the rigors and the discipline that being publicly listed required. We could have had no better coach than Lauralee Martin, who taught us the differences between working in the partnership and at a listed company. All of these lessons were learned in a creative and entrepreneurial environment. I think it was an environment with a strong culture of growing leaders. It is clear that some firms create a number of generational leaders. I think that within the real estate industry, there are certain firms that have created some of the leaders today. Certainly, I was very lucky to have experienced that in all the organizations I worked with. I learned that it was all about the individuals, the culture, and the discipline of the organization. That was a very strong influencing factor.

You are managing a good-sized group of people now at AXA Real Estate.

Yes. Now, I am on the management board of a company with 500 people within AXA Real Estate.

What are some of the management lessons that you have learned from others, which you are applying now?

Empowering and motivating people and giving them permission to be creative. If you can create an environment in which people want to succeed and feel supported about the decisions they make, people can achieve great things. It is also about hiring the best people and developing them. You have to create great teams to do that, particularly in our industry. Getting that balance between team and individual success within real estate is important. I have worked in teams in places where those goals had not been aligned and where one saw good things and bad things. Empowerment, teamwork, long-term vision, and making sure that the team understands the vision and the objectives are some of the lessons that I have learned and which I am applying now.

The industry has gone through a huge amount of change over the last five years, and one might argue that it will go through a significant amount of change over the next five. As you plan your strategy, look at your teams and your staffing, and look at your entire business and what you need to accomplish, what do you think the future will look like?

I see it as constantly changing and evolving. That is why you look for the broad background in terms of staffing. What you are really looking for are intellectual people who can adapt and adjust, who are not threatened by the changes that are coming, and who are creative, innovative, and open-minded. You then try to put a corporate culture around that mix and give people the security and the space that they need in which to operate. People’s reluctance to change inhibits a lot of companies. You are trying to encourage an environment in which innovation and creativity deliver results at a pace that people can cope with.

This interview is the fourth in a series undertaken by the ULI Center for Capital Markets and Real Estate. Previous interviews can be found at the center’s website.