London firm enters property market with £500m fund

London firm enters property market with £500m fund




A London-based financial advisory firm is preparing to fund £500 million of property-secured loans within the UK, according to a report.

 A London-based financial advisory firm is preparing to fund £500 million of property-secured loans within the UK, according to a report from CoStar UK

 
Venn Partners, an advisory boutique based in the capital, will branch into real estate lending in the upcoming year, targeting £500 million of lending focused on the UK and German property markets.  
 
An active funding pipeline is already in place, reports the title, and will allow Venn Finance to complete its first deal in the first quarter of 2013, with the entirety of the £500 million fund to be lent by the end of the year.
 
The group’s newly-made subsidiary will provide both senior and mezzanine loans secured against UK and German commercial real estate and will tend to lend in a 55 to 80 per cent LTV range.
 
Venn, which consists of a group of former bankers backed by Norwegian industrial group Siem Industries, will set up a new firm named Venn Finance under the leadership of Paul House, a former Managing Director and Head of EMEA Real Estate at Citigroup.  
 
House, who will be a founding partner at the firm, has over 12 years’ experience in European banking and has amassed sales of over £10 billion of commercial real estate debts and assets across both private and public capital markets. 
 
The Siem group currently consists of a range of industrial holding companies with interests in a broad array of sectors, including oil service and shipping. 
 
The move comes in the light of the recent successes of the so called “shadow banking market” of alternative lending, through mediums such as hedge funds and structured investment vehicles, following the retreat of traditional lenders from the property market.
 
Such lenders, including high street banks, have left the real estate sector as funding lines have dried up and regulators have imposed ever more exacting rules governing the risk-weighting of property assets.
 
In addition to any direct lending the company might provide, Venn Finance will also host a loan servicing platform, enabling the provider to “act as an aligned investment partner to support institutional investors in participating in the new credit opportunities emerging in the market”, according to a press release.
 
Speaking about the new venture, House said: “I am delighted to be joining Venn Partners to lead our efforts to offer a competitive source of debt capital to our clients, in one of the most compelling investment opportunities in the European credit markets.
 
“The combination of a supportive shareholder in Siem, a best in class credit analytics and structuring team at Venn Partners and the market opportunity create a powerful combination that will facilitate my efforts to build a leading real estate financing franchise.”
 
Speaking about House’s appointment, Jonathan Clayton, Managing Partner at Venn Partners, said: “Paul is one of the finest real estate finance professionals in Europe with excellent track record in completing some of the largest and most sophisticated property transactions over the past decade and we are delighted to have him lead such a relevant and exciting business.”
 

Leave a comment