ICG-Longbow invested more than £365m of its funds’ capital in 18 transactions in the first three months of 2015.
The firm also completed the investment of two funds, the £700m 2013 UK Real Estate Debt Investment III and the £400m 2014 Senior Secured UK Property Debt Investments.
The debt strategy has made 15 deals, all bi-lateral senior loans with terms between five and ten years and LTV ratios ranging from sub-50% to 65%. Most of the investors involved were UK corporate pension funds.
Martin Wheeler, joint managing partner at ICG-Longbow, said: “By adapting our investment strategy to current market conditions and continuing to focus on the small to mid-market across the UK, ICG-Longbow has tried to ensure that its capital remains relevant to today’s property market.”
“In the debt markets, the record level of investment transaction volumes over the last two quarters has fed through into an increase in acquisition financing opportunities and, in the small-mid market especially, there is a more balanced market in terms of supply of capital, which has eased downwards pressure on returns,” said Wheeler.
ICG-Longbow said it had benefited from high investment volumes and refinancing deals in Q1, particularly in the regions. Capital raising was ongoing for the real estate and senior debt strategies.
Deals in the first three months covered the commercial property, industrial and retail sectors as well as non-core student accommodation, hotels and residential development finance.
ICG-Longbow’s parent Intermediate Capital Group (ICG) reported yesterday that the UK Real Estate Debt Investment Fund IV had reached a first close of €500m (£364m) with £50m coming from the balance sheet and further closes expected this year. It had also raised £500m for its senior debt strategy taking the total amount to deploy to £650m.
ICG-Longbow said several loans originated in 2011 or 2012 had been repaid. Its UK Real Estate Debt Investment Fund II had returned over 50% of investor capital and had produced an internal rate of return of 19%.