ICG-Longbow plans float in London for senior debt fund

The company wants to raise a minimum of £100m on the London Stock Exchange for a company to invest in senior UK commercial property debt. The plan sits alongside Longbow’s fundraising for its third mezzanine vehicle, which has a traditional LP structure.

ICG-Longbow, the London-based company 51 percent owned by Intermediate Capital Group, is planning to raise a minimum of £100 million (€125 million; $160 million) by floating a closed ended real estate debt company on the London Stock Exchange.

The company has hired Investec to advise upon the Initial Public Offering (IPO) of ICG-Longbow Senior Secured UK Property Debt Investments Limited, which will invest in senior UK commercial property debt, by making new individual loans with a maximum exposure of 65 percent loan to property value – seen as less risky than mezzanine real estate investments.

In the announcement it said the minimum it hoped to raise was £100 million, though the final amount would be capped at £250 million.

David Hunter, chairman of ICG-Longbow, said: “This new vehicle will aim to provide investors with predictable and attractive target returns with minimal risk of income or capital loss.”

The plan to float the senior real estate debt company comes in addition to ICG-Longbow’s third mezzanine real estate debt fund, for which it is seeking to raise £500 million. PERE revealed last month how placement agent Threadmark had been appointed for the task of raising Longbow UK Real Estate Debt Investments III that will have a traditional private limited partner structure unlike the public company.