Mix together an early interest in investing, an entrepreneurial bloodline, an appetite for hard work and a serendipitous coincidence, and the result is the successful career of Justin Cooper ’09, ’10 M.S., who founded his own real estate private equity company, Layla Capital, in Manhattan in early 2017.
Cooper got his start as an investor during dining table conversations growing up in the Philadelphia Main Line suburb of Bryn Mawr, Pennsyl-vania. His father ran an options and program trading firm. “For as long as I remember, our family dinners consisted of conversations about how to quantitatively analyze the stock market and other macro-economic topics,” he says.
Cooper opened his first trading account at age 13 with a small amount of money he received from his Bar Mitzvah. “I spent nearly an hour each night learning about different companies and how to trade stocks.”
In January 2017, at 30, Cooper created New York City-based Layla Capital, which focuses on small- to middle-market commercial lend-ing opportunities. The firm began making deals by the third quarter of 2017. Three early deals were first-mortgage bridge loans on properties
Whitman / Spring 2018 / 15 in Amagansett, New York, (for $425,000), Allenhurst, New Jersey, (for $900,000) and Brooklyn, New York, (for $780,000). About $20 million worth of deals are in the pipeline.
Though running a business is demanding, Cooper says it gives him the flexibility to spend more time with his most important assets: wife, Melanie, and children, Charlotte and Ryan.
“Entrepreneurialism was in my blood from birth,” Cooper says, surveying his family history.
After returning home from his service in World War II, Cooper’s frater-nal grandfather, Sidney, purchased a car and some electronic appliances and began selling his wares door-to-door. He went on to create Silo, a retail electronics chain that operated from 1947 to 1995 and had over 230 stores at its peak.
After graduating from Harvard Business School, his father, Richard, bought a seat on the Philadelphia Stock Exchange and started trading options. He realized that options could be analyzed quantitatively and he could make markets based on that. In 1981, he launched Cooper Neff & Associates, a proprietary trading company specializing in quantitative approaches to the exchange-traded options market that he eventually sold to BNP Paribas.
Cooper’s other grandfather, Stuart Frankel ’61—founder and CEO of Stuart Frankel & Company, a former Syracuse University Trustee, member of the Whitman Advisory Council and Whitman benefactor—influenced his college choice. “He has always spoken with such reverence for the school and to see his passion for the University decades after graduating always intrigued me,” Cooper says.
On his first visit to Whitman, Cooper walked around the faculty floor and spoke to several professors about the curriculum and their classes. “I instant-ly connected with professors Milena Petrova, Tom Barkley, Yildiray Yildirim and a few others. I knew that Whitman was the place I wanted to be.”
He worked every summer during college and graduate school for sever-al large financial firms. “When I started working at Lubert-Adler before my senior year, I knew exactly what I wanted to do with my life,” Cooper says. Lubert Adler, a large real estate private equity that develops commercial properties around the globe.
“I could not get enough of it,” Cooper says. “I was actually upset when days ended and it was time to go home each night.”
He studied finance and accounting at Whitman, graduating magna cum laude, and received a master’s in finance. While in graduate school, he made weekly visits to see Tom Foley, then the executive associate dean, looking for names of donors who worked in real estate. One day, Foley gave him the business card of Jonathan Daniel ’94 with the name Silo Financial.
“I knew it was fate,” Cooper says, thinking of his grandfather Sidney’s company of the same name, though decades prior.
A get-together over drinks in New York City ended with Daniel offering Cooper a job in his real estate private equity shop focused on commercial lending—similar to what Layla Capital does now.
“I worked with him for nearly three years. It was a very entrepreneurial shop, with only three other employees, and I did a little bit of everything: mortgage servicing, underwriting, negotiating and structuring deals, meeting clients, sourcing deals, raising capital, visiting properties. This was where I was able to learn all aspects of running a private lending business.”
From Silo, Cooper moved with his fiancé Melanie (now wife of nearly five years) to a distressed debt hedge fund called Stabilis Capital Man-agement based in New York City. He joined when the firm was running its second fund with around $240 million in assets under management. He ran a portfolio of about $75 million of distressed debt from 2012 to 2014. When defaulted notes became harder to buy at prices that made sense, Cooper worked with the CEO to launch a direct lending platform. Since then, the company has grown to nearly 30 employees and $2 billion across several funds.
Cooper left Stabilis in 2016 and spent a year at a family office-backed private commercial real estate investment firm before leaving to pursue his dream of running his own company—building on what he’d learned from all of his experiences and “adding my own flavor to the mix.”
Layla Capital was the fruition of that dream. Layla is his daughter Charlotte’s middle name (he and Melanie also have a son, Ryan) and the name of his favorite Eric Clapton song. Cooper founded Layla Capital “on the principals of honesty, consistency and professionalism in all ar-eas of our business practices, especially in our lending process,” he says. “We believe in always treating our borrowers like our partners rather than as debtors.”
Building relationships is key. “We believe in working with borrowers, not against borrowers. Over the long term, it tends to be a much more successful workout strategy.”
He says Layla Capital also practices what he calls “coopetition.”“We would much rather be friends with some of our top competitors in the space and potentially partner together on deals over the long term rather than isolate ourselves. Some of the best deals we have closed to date have come as referrals from competitors.”
Cooper says the best lesson he’s learned is that “the expression ‘nice guys finish last’ is nonsense.” He’s worked with what he calls “some of the smartest and wisest minds in the business ” and he prefers “the approach that you attract more flies with honey than vinegar.” He plans to stand by that way of doing business to grow Layla Capital for years to come.
Comments