Madison Dearborn real estate group spins out

In the latest changes at the Chicago-based private equity firm, Brian Newman and Michael Wilson have formed Ceres Real Estate Partners together with iStar veteran Jeffrey Digel.

Madison Dearborn Partners’ real estate group has spun out to form Ceres Real Estate Partners.

Chicago-based Ceres is being led by former Madison Dearborn executives Brian Newman and Michael Wilson. They have been joined by ex-iStar veteran Jeffrey Digel. The firm is expected to target debt, hospitality and senior housing among other opportunities.

Newman was head of Madison Dearborn’s real estate group, investing in the asset class through Madison’s private equity funds. He previously co-led Merrill Lynch’s Global Principal Investments group with responsibility for both equity and high-yield debt, and was formerly an acquisitions executive with Walton Street Capital.

Madison Dearborn is currently raising its sixth private equity fund, with a reported target of $7.5 billion; the amount is a quarter less than it had originally wanted to raise, but the firm scaled back its plans amid tougher fundraising conditions affecting many mega-funds.

Chairman and founder John Canning relinquished his CEO role in November 2007 ahead of the fundraise. The post was taken up by former co-presidents and fellow founders Sam Mencoff and Paul Finnegan. At the time, Canning, who is also chairman of Chicago’s Federal Reserve Bank, told Chicago Business the move “signals to the outside world that we have a management transition plan, and not just in the event that someone gets hit by a bus”.

The firm's chairman, John Canning, relinquished his chief executive role in November 2007, saying he always planned to step down as CEO when Madison Dearborn launched its sixth fund. Canning also serves as chairman of the Chicago Federal Reserve Bank.