ICG-Longbow kicks off £500m UK debt fund

London-based Longbow Real Estate Capital has begun marketing its latest UK real estate debt vehicle having hired Threadmark as placement agents.

ICG-Longbow Real Estate Capital has began marketing a £500 million (€615 million; $807 million) UK property debt fund as the latest example of an alternative financier of property looks to fill the void left by traditional banks.

PERE has learned the London-based company has appointed placement agent Threadmark to raise Longbow UK Real Estate Debt Investments III, which would be double the size of predecessor fund, Longbow UK Real Estate Debt Investments II. That vehicle accumulated £242 million of capital commitments and closed in September 2011. It means that Longbow is on the fundraising trail again less than a year after raising its current vehicle.

The company was started in 2006 as an investment manager solely focussed on the UK in order to provide senior, mezzanine, and whole loans to Britain’s commercial real estate sector. It is 51 percent owned by Intermediate Capital Group, the London-listed credit company.

Target returns for Longbow UK Real Estate Debt Investment II are stated as being 14 percent a year, and the new vehicle is thought to be targeting a similar IRR.
The company also manages a single investor mandate of £100 million designed to return more than 20 percent via mezzanine and preferred equity investments.

Longbow is led by joint managing partners, Kevin Cooper and Martin Wheeler. They were both founding members of GMAC’s UK Commercial Mortgage business, which was established in 2002, which was subsequently sold off in 2010.

News of the firm’s fundraise comes just a week after it emerged that Longbow had recruited Graham Emmett, former head of lending and corporate finance at Ireland’s National Asset Management Agency (NAMA) as a partner to help further drive the business.

Threadmark was established in 2009 by Anne Gales and Bruce Chapman, two former professionals at CP Eaton Partners in London.

Longbow and Threadmark declined to comment.