UK insurance giant Legal & General is reportedly gearing up for a real estate lending drive.
The Financial Times said today Ashley Goldblatt has been asked to concentrate on devising a strategy to invest in debt in the property market.
Goldblatt joined Legal & General in 2007 and has been working in its fixed income division. He was previously head of fixed income at French insurer Axa and head of commercial lending at Prudential before that.
Legal & General declined to comment to the FT about its strategy. However, numerous participants in European commercial property have pointed to alternative and non-traditional real estate lenders expanding their operations to fill a perceived ‘lending gap’.
Global property services firm, Richard Ellis, said in a European Capital Markets report last year that insurance companies 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.”
Axa, Pramerica, and London-based Duet Group are among those stepping up their lending and debt investments.
Legal & General has a property investment management arm which manages 16 funds as well as two segregated accounts with a total of £9.8 billion (€11 billion; $15 billion) of assets as of December 2010.
The Life Fund is the largest vehicle with around £2.5 billion of property. It invests in UK freehold and leaseholds including offices, shopping centres, high street shops, retail warehouses, industrial and distribution units and farmland.