Jack Perry, former chief executive of Scottish Enterprise and chairman of CBI Scotland, has joined ICG-Longbow Real Estate Capital as chairman of its forthcoming UK real estate debt fund.
Perry will chair ICG-Longbow Senior Secured UK Property Debt Investments, which is aiming to close next week. Its initial public offering on the London Stock Exchange is seekingto raise between £100 million ($161 million; €124 million) and £250 million. Investec is the sole bookrunner and advisor on the IPO.
The fund will provide senior secured loans for UK commercial properties. The listed vehicle will aim to deliver to investors dividend income of about 6 percent per annum through building a portfolio of high-quality, defensive senior debt investments secured by UK property investments. Individual loans will have a maximum loan-to-value exposure of 65 percent.
Dividends will be paid quarterly, and the fund will target underlying portfolio IRR of 8 percent per annum. Yield in the first year is expected to be between 4 percent and 5 percent as the funds are invested, with the fund likely to be fully invested withing six to nine months.
In a statement, Perry said: “We see a looming £44 billion shortfall in the supply of senior debt to the UK commercial property sector, and we are delighted to offer investors an opportunity to originate new loans, underpinned by attractive credit fundamentals and with very attractive predictable returns.”
ICG-Longbow is 51 percent owned by ICG, a UK-listed specialist in subordinated debt and minority equity investments.
Perry was a senior partner at Ernst & Young before later becoming chief executive of Scottish Enterprise between 2004 and 2009, as well as chairman of the CBI in Scotland for two years.