AgFe has designs on adding to the UK and Europe’s non-bank alternatives to real estate senior lending by launching a £1 billion a (€1.2 billion; $1.6 billion) fund.
The London-based firm told PERE it was looking to lend to UK real estate in loan to value situations of up to 70 percent using the capital in the fund.
The fund would be managed by Natalie Howard who formerly ran real estate debt funds at Lehman Brothers’ private equity real estate business for Europe and Asia. Prior to that, she led the real estate lending business of UK bank Barclays, where she also set up its commercial mortgage-backed securities business. She also previously worked for Morgan Stanley.
News of the fund launch comes just a day after DTZ issued research into global real estate debt, suggesting that Europe’s funding gap has more than doubled to $182 billion thanks to the European Banking Authority’s new capital reserve ratios piling pressure on traditional banks. The gap is defined as the difference between the existing debt balance secured by commercial property as it matures, and the debt available to replace it.
AgFe becomes the latest in a growing contingent of groups looking to capitalise on the UK’s debt funding void. Others include fund manager Henderson Global Investors and insurers Legal & General and M&G, the investment management arm of Prudential.
AgFe was established in September 2006 by a team of experts in fixed income, financial assets, structured finance, securitisation, leveraged finance, credit and infrastructure. It had specialised in providing advisory services in the private and public sectors including to central banks, regulators, commercial banks, asset managers and other companies.
The firm has made the decision to now branch out into fund advisory and investment management. As well as real estate senior debt, the company has plans to launch another fund although it would not be for real estate investment.
The firm is led by partner and chairman, Richard Atterbury, who is a former vice chairman at Nomura International, having previously been co-head of European capital markets and global co-head of the financial sponsors group at Lehman Brothers. He also spent seven years at Morgan Stanley in London where he was global co-head of the financial sponsors group and chairman of European leveraged finance.