UNITE HERE, a union of North American hospitality workers, has issued a report targeting private real estate manager Noble Investment Group for failing for register with the US Securities and Exchange Commission (SEC).
The document, which is directed to LPs and regulators, questions why Noble has yet to register, despite the fact that the firm is in the process of raising its third fund, Noble Hospitality Fund III, with a target of $250 million. The firm has approximately $712 million in assets under management, according to data from PEI’s Research and Analytics team.
“We’ve broadly been focused on private equity and private equity real estate managers active in the hospitality industry, and we were struck by the fact that Noble had not registered,” said UNITE coordinator Jim Baker in a call with pfm.
Noble did not respond to requests for comment.
It’s likely, says one fund formation lawyer with experience with UNITE, that the union is going after Noble in relation to a property that UNITE is trying to unionize. But despite UNITE’s claims that Noble is bucking the industry trend, that is not necessarily the case, he added.
?“Many other real estate managers have not registered because their real estate investments do not include ‘securities’ and, therefore, they are not required to register,” he noted. “Registration under the Advisers Act has become enormously burdensome and many small real estate managers cannot afford the burden of compliance and see no benefit from registering (i.e. their clients are not demanding it).”
The report is the latest of UNITE’s forays against the private equity industry. In February, the union released a list naming responsible and irresponsible private equity and private real estate fund managers in order to “help pension funds and institutional investors make smart decisions about where they invest.” The list evaluated managers by their responsiveness to outreach, the labor disputes at hospitality properties or portfolio companies and their track record of ensuring “labor peace.”