The Real Deal New York

Consulting firm sues USAA for alleged unpaid fees on $110M in deals

Confido seeking at least $3M in damages
By Rich Bockmann | July 26, 2017 04:10PM

Confido Advisors’ CEO John Rodriguez

A New Jersey-based consulting firm is suing the real estate arm of USAA, claiming it’s owed fees on $110 million it helped secure for the financial services firm from South Korean investors.

Confido Advisors, headed by CEO John Rodriguez, is seeking no less than $3 million in damages, according to a lawsuit the company filed in New York State Supreme Court last month. Representatives for USAA could not be immediately reached for comment.

The firm claims it signed an agreement with USAA Real Estate Company to act as its exclusive agent to make introductions to real estate investors in South Korea, where it had years of experience securing commitments for “U.S. private equity funds, hedge funds and other U.S. investment vehicles” through a network of more than 2,000 contacts.

“During the term of the consulting agreement … Confido introduced [USAA or its affiliates] to approximately 100 prospects, of which about 15 have since made a capital commitment to a USAA investment vehicle,” the complaint read. “In total, capital commitments made by prospects that Confido introduced to USAA or its funds amounted to approximately $600 million.”

The two sides had agreed that Confido would earn a reduced fee if an investor the firm introduced to USAA during the term of the exclusive agreement made a commitment after the agreement expired in December 2015, according to the lawsuit.

As that deadline came approaching, Confido submitted the names of several investors to USAA that it wanted included on a list of companies it would receive the reduced fee on. Confido said two of those investors, including the Korean Fisheries Pension Fund and Seoul National University, eventually made $40 million worth of commitments to USAA, which excluded them from the list.

Other investors made the list but USAA never paid Confido the fees, including Korea Post, which made a $70 million commitment, Confido claims.

The specific deals Confido’s contacts invested in were not disclosed, but USAA Real Estate has been active in New York.

The company partnered with Madison Realty Capital last year to buy the 16-story Buchanan rental building at 160 East 48th Street for $270 million.

In 2015 it teamed up with Waterman Interests to buy a pair of Garment District buildings for $118 million.