Press Release: The story of Panama Portfolio
Panama Portfolio, an asset manager specialized in private equity investments in Panama, was founded in 2006 by Henri Kerkhof. Henri made his mark at an early age (27) as General Manager of the largest furniture chain (600 employees) in the South of The Netherlands, greatly expanding turnover and profits and adding significant shareholder value. After a number of years, he left the Netherlands and emigrated to the USA with his American wife, and specialized in real estate. After developing his own valuation model to rank the attractiveness of international real estate Henri identified Panama, Central America, as one of the most attractive countries for real estate investments. Subsequently, in the years 2006-2009, he founded and expanded Panama Portfolio, backed by a group of 30 Dutch investors including the family office of his former employer in The Netherlands.
In 2007 Panama Portfolio hired Marvin Ortega as the president of Panama Portfolio. Mr. Ortega, a former ABNAMRO banker and a Panamese national, added necessary local expertise and in the following years, the team was expanded to the current 35 FTE’s. Mr. Ortega holds a significant percentage of Panama Portfolio shares.
Panama Portfolio started with buying undervalued “rough, undeveloped” land, often untitled, at top locations in Panama, mostly beachfront, but also in the beautiful mountains near Altos de Campana National Park and near Lake Gatún. Locations included 85 acres of pristine beachfront land at the Pacific Coast near the border of Costa Rica (see www.cocobeachpanama.com) and various other land assets at top locations (see www.panamaportfolio.com ). Over the years the group builds up a land portfolio of approximately 1000 acres at 16 locations in Panama, 100% financed with private equity without any bank loans. Also, the group bought and managed a small hotel and apartments in Panama City, which was sold after a number of years.
Originally the business model involved primarily land trading, however, it became clear that in a number of cases more value could be added by developing the land into sustainable gated communities including amenities and services. Subsequently, the business model shifted towards project development and real estate construction, tailoring to the expanding Panamanian middle class and the exploding retiree market (Panama is ranked as a top destination for international retirees).
Currently, Panama Portfolio is actively developing three large sites, which involves titling, infrastructure installation, master planning, residential zoning, environmental permitting, construction permitting and construction of Real Estate. At these three sites construction of real estate (f.e. villas, pools and other amenities) has started. The other 13 locations are in various stages of development regarding titling, infrastructure planning and permitting. In general, it takes 8-10 years in Panama to fully develop a project from the initial purchase of untitled land to titled sustainable communities, this seems long, but also in the Netherlands projects of this size take 5-8 years completion time.
What is unique about Panama Portfolio is that Panama Portfolio controls all elements in the value chain such as land trading, real estate development, construction and international marketing (all sales and marketing are done in-house). Over the past 12 years, the company has gained valuable experience dealing with all the local rules and regulations inherent in international project development and has become an expert in Panama. Another unique aspect about Panama Portfolio is that it is operating without bank debt and that the asset manager is not using a participation structure, any investor actually owns land in his name, and is the legal owner of the property, which greatly reduces risk.