The DI Wire sat down with NorthStar Securities president and CEO Tim Toole to discuss the company, his background in the alternative investment space, and sage advice for those considering a career in the financial services industry.
Can you briefly share a bit about your background within the commercial real estate industry?
I entered the alternative investment business and specifically, the real estate business, in 2002. I started with Deutsche Bank and one of its subsidiaries, RREEF, marketing a REIT IPO. I then joined Houston-based, Hines Real Estate Interests in 2003. This was my first foray in direct real estate with a best-in-class real estate organization. In 2009, I joined NorthStar Realty Finance and started the NorthStar Securities broker-dealer. Over those years, I was able to successfully build distribution organizations, position investments and raise roughly $10 billion in equity and approximately $20 billion in real estate assets.
What is unique about Northstar Securities’ investment approach?
Several things are unique about NorthStar’s approach, but NorthStar Securities is probably best known for creating the retail commercial real estate debt market/investment opportunity. As a broker-dealer, the organization was able to identify an unserved market segment, leverage in-house expertise and deliver excellent portfolios using CRE loans and other CRE debt investments. The offerings were designed to generate attractive income in a challenging income environment.
What would you say differentiates Northstar Securities’ alternative investment offerings?
NorthStar Securities has been consistent in its approach since inception. We have attempted to align with best-in-class institutional asset management firms that build and manage offerings reflecting their core strengths. We have identified asset classes and vehicles that are differentiated but not too complex, designed to help financial advisers and their clients build better portfolios and reach their goals.
Where do you see the industry heading? How will it be different in the next five or ten years?
Technology will take hold in the alternative arena over the next 5-10 years. To be successful, alternative investment providers will need to continue to design offerings to preserve the attributes of alternatives while being available for use on technology-driven platforms and in all types of advisory accounts. Investors will be asking, “How do I buy a private placement on my iPhone?”
What advice or insight would you give to someone just starting out in the industry?
The financial services industry is an excellent place to start and develop a career. The opportunities in investment management, sales, marketing or compliance appeal to different skills and talents and all offer interesting challenges and potential advancement. The successful individual entering the business today will realize that financial literacy in the U.S. has always been a work in progress. More investment information is available than ever before, yet it is also harder to decipher in a productive and efficient way and meet the needs of investors and their individual goals.
Learning how to apply information while contemplating investor needs is a skill set that will never go out of favor, and particular effort should be spent understanding taxation, the use of portfolio diversifying investments and income planning. In addition, exploring and applying new technologies will allow the new generation of financial services employees to set themselves apart and appeal to new investors who look to conduct affairs on their smart phones.
In the next 15 years, more millennials will establish successful careers while the oldest generations will be passing money to younger generations at levels never seen before. Effective knowledge of portfolio construction, using alternative investments, investment management and productive financial planning will never go out of style.
What is something our readers would be surprised to learn about you?
Something surprising? I am a disciplined professional but one that is very adventurous. I was the second youngest person ever to float the Colorado River at age 6 and have spent vacations on a bicycle with a single change of clothes exploring Poland, Alaska and Ireland. My next goal is to hike the Sacred Inca trail to Machu Picchu.
What do you consider to be your biggest professional accomplishment?
I have helped thousands of investors reach their investment and life goals and raised tens of billions of dollars for investment managers but without question the single best professional accomplishment has been working with, befriending, and mentoring hundreds of investment personnel and helping foster their career success over the last 30 years.
What has been your greatest personal accomplishment?
My family is my best personal accomplishment. I have a wonderful wife who has tolerated me for 20 plus years and three incredible kids that are talented, independent and thoughtful.
What keeps you awake at night?
Trump’s tweets and chocolate
What book on real estate or investing would you recommend to our readers?
Investing in REITS by Ralph Block and Built to Last by Jim Collins and Jerry Porras
Is there anything else that you would like to add?
Real estate investing will continue to drive investment returns now and well into the future. As Mark Twain said “Buy land, they’re not making it anymore.”
NorthStar is a sponsor of The DI Wire, and the Q&A was conducted as part of their standard directory sponsorship package.