Henderson Global Investors is sounding out investors for a potential real estate debt fund as more firms look to take advantage of a funding gap in commercial property.
The London-based investment management firm, which is one of Europe's largest with around £61 billion (€69 billion; $97 billion) of assets under management, has been conducting ‘investor due diligence’ to gauge the potential of a vehicle, PERE has learned.
Though the company said it had no definitive plans for a fund launch just yet, the company hopes to take advantage of demand for new providers of finance to the commercial real estate market, it said.
Any product could be managed by Henderson’s global property fund management business, which has £11.8 billion of real estate assets, in conjunction with another division of the wider listed investment management firm.
The news comes just days after the Financial Times reported how insurer Legal & General was also looking to step into the real estate lending void created by traditional lending banks scaling back, stepping out, or concentrating on their existing loan portfolios.
Basel III, which requires banks to hold higher capital reserves against its loans, may cause additional banks to reconsider or reduce their lending activities ahead of its January 2013 implementation.
A report by global property services firm, Richard Ellis, last year said alternative lenders had spotted the opportunity and had entered into the market at senior and junior debt levels. “This reflects the changing dynamics of the sector as alternative lenders seek to improve returns through commercial real estate lending,” the report said. It added: “This growing interest brings Europe more in-line with the US, where institutions have long been active and account for nearly 20 per cent of commercial real estate lending.”