NREP, the Copenhagen, Denmark-based private equity real estate firm focused on investing in the Nordics, is deploying resources to increase its presence beyond the Northern European region.
The firm has appointed Emanuele Bena as its London-based head of capital markets. Bena is NREP’s first non-Nordic partner and his role is also a newly established position. The firm is also opening an office in London, its first outpost outside the Nordics for transaction purposes. It also has an office in Luxembourg, where its real estate funds are domiciled.
Bena joins from JPMorgan where he was an executive director in its EMEA real estate and lodging investment banking team.
NREP’s decision to expand its regional presence beyond the Nordics is being driven by a desire to increase scale operationally, given the growing size of its real estate strategies, and consequently growing financing requirements. The firm is currently in market with its fourth real estate value-add vehicle, NREP Nordic Strategies Fund IV. If the firm is successful in raising its €1.25 billion target for the fund, which was launched in September 2019, it will not only be NREP’s biggest-ever fund but also the largest within the Nordics market. Its predecessor, Nordic Strategies Fund III closed on €904 million in May 2018.
Explaining the rationale behind the hire, Jani Nokkanen, partner and chief investment officer at NREP told PERE: “Traditionally, here in Nordics, most of property deals are financed by local banks. Within NREP’s portfolio as well, around 99 percent is financed through normal bank mortgages, of which the majority is with Nordic banks. The leverage here is quite cheap and it is a very efficient process. However, when you grow large enough, you need more debt financing partners. This not only includes banks, but also structured finance, bonds and credit funds, and those are mainly located in Germany and London. We need those partners for fueling our growth in the future.”
The need for more debt financing partners also comes from the firm’s ambition to pursue more mergers and acquisition transactions from its fund capital. Nokkanen said the firm wants to do more corporate transactions and has been actively looking at buying both private or listed real estate platforms or companies.
NREP kickstarted this process with Nordic Strategies Fund III, through which it acquired a 50 percent stake in Tetris, a Danish development company with a senior housing product ready to scale, last year. That was the firm’s first corporate mergers and acquisition transaction.
“Emanuele has been with JPMorgan for 15 years and he will add substantial capital market experience, as well as valuable support for structural and M&A-type deals,” added Claus Mathisen, the firm’s chief executive.
Nordic Strategies Fund III and Fund IV have both focused on investing in rental apartments, student housing, senior living and logistics. In terms of geographical remit, both fund’s documents have an investment limitation whereby up to 10 percent of the capital can be invested outside the Nordics region.
“Within the segments we operate, we have been looking at transactions in the Northern European region several times. Our funds have a restriction on investment outside the Nordics, but we do see investments that are attractive within the boundaries of this,” said Nokkanen.