GWM plots €300m RE investment spree in Europe

The London-based financial services group says it is flexible in terms of the form of its capital outlays and geographies following its purchase of an equity position in a Prelios-managed fund announced yesterday.

GWM Group has set its sights on up to €300 million of real estate related investments in Europe in the next 18 months.

The London-based financial services group revealed its expectation to PERE after announcing yesterday it had purchased the equity position in an Italian fund managed by Prelios, the Italian real estate investment management group formerly called Pirelli Real Estaste.

“We have a big allocation to European real estate,” revealed Gennaro Giordano, managing director at GWM Group, “It is not preset but we expect we will be able to invest between €200 million and €300 million more in the next 18 months.”

Through its asset management and alternative co-investment division, GWM Institutional, the firm has acquired the equity portion of a closed-ended fund called “Clarice” which owns 70 properties in Italy, let to Telecom Italia, valued at approximately €220 million.

GWM’s involvement in the fund began a year ago when it opportunistically bought out the fund’s 40 percent equity position from Danish investor Europæiske Ejendomme Holding which was in need of liquidation and which Giordano described as a “distressed seller”.  The acquisition was completed following about one year of negotiating with the fund’s principal lenders Deutsche Bank and M&G Investments responsible for the securitisation of the remaining 60 percent of the fund’s capital.

Although the fund is currently slated to expire in 2021, GWM will now work closely with Pirelli and the two lenders, representative of a number of bonds and underlying investors, to liquidate the vehicle with a view of generating opportunistic returns of 20 percent or more.

“This was a very complicated transaction because the seller had a part in the securitisation with not many rights. We worked hard with Deutsche Bank and M&G to work through the structure,” said Giordano, who previously worked at Lehman Brothers for a spell.

Looking forward he said GWM was keen to build on the handful of deals in the UK and in Europe in the real estate already executed recently. “We’re very flexible in terms of the form of capital and geographies,” he said.

Investing mostly Italian high net worth and institutional capital out of a series of multiple asset class, special situations funds – which the firm to declined to divulge further details about – GWM has been quietly racking up the deals.

According to Property Week, the UK commercial property magazine, late last month GWM joined Helios Capital in supplying an £85.5 million (€100.1 million; $124.1 million) loan to Irish developer Aldgate Developments for a speculative development in Aldgate in the City of London.

The magazine also reported that GWM had provided 10 percent of the equity for the £750 million sale and leaseback of 12 Spire Healthcare hospitals by New York based private equity firm Och-Ziff Capital Management, London-based Moor Park Capital and Malaysian state fund Employees Provident Fund (EPF).