Henderson Global Investorsis sounding out investors for two UK and European real estate debt funds, it has said.
The declaration – which comes a year after PERE revealed that the London-based investment management firm was considering the move – underlines the momentum gathering among non-bank sources eyeing the raising of debt vehicles.
Henderson said it was “engaging with investors” on the launch of two funds for the institutional market. Via both the funds Henderson aims to capitalise on the “broad retraction” of European bank lending and would have a common focus on “premium real estate” with strong sponsorship.
If successfully raised, the first vehicle, the Henderson High Income Real Estate Debt Fund, would invest in both senior and defensive subordinated real estate secured debt. Investments would predominantly be newly originated and secured by high quality leased real estate in well established markets at leverage of up to 75 percent loan-to-value. The seven-year vehicle will target a gross IRRs of between 8 and 10 percent largely to be provided by coupon income.
Meanwhile, the firm is also launching the Henderson Senior Secured Real Estate Debt Fund to invest in senior ranking and “conservatively structured” real estate loans at leverage of up to 60 percent LTVs. The loans would again be newly originated and secured against premium property in the most well-established UK and Europan locations. Target total gross return will be between 5 percent and 6 percent per annum. Though bother vehicles are aimed at the UK and Europe market broadly, loans are expected to focus on the UK initially.
John Feeney, head of real estate debt, will lead the effort and Colin Fleury, head of secured credit at Henderson Global Investors, will provide oversight and direction of team resources. Marcus Langlands Pearse, director of property, will co-ordinate and oversee the real estate debt due diligence process.
Feeney said: “Investor interest in real estate debt has continued to increase, and many investors are now familiar with the highly attractive risk-adjusted returns available. Following detailed research we have now developed two targeted strategies. With a focus on high quality property and well-capitalised, expert sponsorship, our aim is to deliver the premium fund products in this fast-evolving market”.