Property investment manager CBRE Global Investors is stepping up its efforts in the European and North American real estate lending markets following two key hires for its UK and US-based credit teams.
On 28 April, the manager announced it had appointed Isabelle Brennan from M&G Investments to spearhead capital raising activity across Europe and North America. In the US, it announced the appointment of former real estate banker Michelle Liu as a managing director and senior originator for the Americas.
According to Emma Huepfl, managing director of the EMEA credit division at CBRE GI, the appointments underscore the importance of credit to the firm and its investors’ portfolios. “The credit platform has been identified as one of the growth areas for the business,” she told Real Estate Capital.
“In addition to Isabelle and Michelle’s appointments, we have some more hires in the pipeline, which will be announced in June.”
With more than 16 years’ lending experience with banks and specialty finance companies, most recently at the real estate finance group of US lender CIT bank, Liu has been appointed to focus on deploying capital on behalf of the Americas credit division, based in New York.
Brennan, who was most recently a director of M&G Investments’ real estate credit platform, has been hired as global investment solutions officer and will be based in London.
Brennan will work in partnership with Alice Wilcox in CBRE GI’s investor solutions department, which is responsible for marketing the manager’s suite of real estate and infrastructure products to investors in the UK and Ireland.
In addition to the two hires, Heupfl told Real Estate Capital that CBRE GI is revisiting its plans to expand its lending business in continental Europe.
CBRE GI entered the European real estate debt market in November 2019, with the acquisition by its parent organisation, consultancy CBRE Group, of London-based credit specialist Laxfield Capital. CBRE GI had been operating a US debt strategy since 2010.
In July 2019, ahead of its Laxfield purchase, CBRE GI also appointed Marco Rampin from CBRE’s debt advisory business to lead European expansion. However, Rampin has since left the business to take up a role with US private equity firm Cerberus Capital Management.
Huepfl explained that CBRE GI’s European lending remains predominantly centred on the UK. “The company manages real estate loans in continental Europe but, in terms of new lending, it is UK-focused.”
But the manager, Huepfl added, plans to set up its pan-European strategy. She said that the launch was delayed due to the impact of covid-19. “We put the launch of a European strategy on hold during the pandemic because we wanted first to see how the market would respond and make sure the risk-return dynamic was attractive.
“We are now reassessing that opportunity. Ultimately, whilst we are very active in the UK and the US, we want to have a global debt business where we can leverage the synergies we have across our organisation. That will include expanding into other European markets.”
According to Huepfl and Brennan, demand from institutional investors to put capital to work in real estate debt, is the key driver behind CBRE GI’s credit push. Much of this demand, they explained, is from fixed income investors looking for an uplift from low-yielding corporate and government bonds.
Huepfl said: “We are responding to investors’ growing demand for credit, which they see as an asset class that can offer them portfolio diversification and downside risk protection.”
Brennan added: “We are looking to design products that meet those requirements, not just looking at the deployment opportunity, but also understanding the key drivers for investors, as they have different needs depending on where their allocation comes from.”
The opportunity to tap into the growing financing gap left by banks further prompted the firm’s debt plans, Brennan said. “The opportunity remains for non-bank capital to supplement the traditional sources of debt in the market. If anything, the pandemic has expanded that entry opportunity for new investor capital.”