London-based private equity real estate firm Ashby Capital is looking to branch out into the real estate debt market having already established a debt platform focused on UK lending.
A source close to the firm told Real Estate Capital Europe that the business had a lending platform seeded with an initial commitment of £100 million (€114 million). It will lend off its own balance sheet at fixed rates, offering flexible solutions with no requirement for hedging, they added.
The company, founded by Peter Ferrari in 2013, has until now focused only on equity opportunities, acquiring and partnering on prime office schemes, retail parks and mixed-use developments.
Charles-Etienne Lawrence, the firm’s investment director, is understood to be leading the new debt platform. Lawrence has significant banking and private equity experience, having previously worked in origination and debt advisory at UK banks HSBC and Royal Bank of Scotland, as well as at Washington-based real estate firm JER Partners.
The firm’s debt platform will focus principally on development loans and mezzanine debt with a £10 million to £50 million ticket size and a term of between one and five years. Its preferred sectors are expected to mirror its £1.8 billion equity portfolio, which invests in central business districts offices and retail warehousing, as well as other commercial real estate sectors.
Ashby declined to comment.
The firm is one of a number of investment managers considering a move into the debt space, as revaluations and rising interest rates make the sector more attractive. Last week, Real Estate Capital Europe reported that equity focused London-based firm Aprirose was looking to enter the debt market. Last month, Real Estate Capital Europe wrote Pennsylvania-based private equity firm Federated Hermes rolled out its first pan European real estate debt fund, targeting up to €500 million in equity.
This increased interest for the real estate debt market from alternative lenders was backed by London-based finance industry body the Loan Market Association’s sentiment survey which cited a significant growth for debt funds, comparative to other lending sources, in 2023.
However, Ashby had been considering branching out into debt before the change in the market, having identified an opportunity to use its knowledge of real estate development and contacts within the industry to source the best opportunities with high-quality sponsors, the source added.
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