DRC Capital has hired Trevor Homes (pictured) from Islamic property bank Gatehouse to head its senior mortgage lending in the UK and Europe, Real Estate Capital has learned.
Homes will join the independent debt fund manager in early October. In his new role, Homes will manage the three funds which form DRC’s senior lending strategy, a part of the business that the London-based firm is aiming to grow. The firm said it expects to raise more than €500 million across the three funds.
Homes joined Gatehouse Bank in October 2015 and led its small ticket lending across the UK, France, Germany, Benelux, Spain and Italy. In the two years prior to that, he ran ICG-Longbow’s senior loan programme, focusing on small to mid-market lending across the UK. Prior to ICG-Longbow, he worked at Italian bank UniCredit.
DRC’s three funds which are currently active in senior lending include its Europe Real Estate Senior Debt III vehicle. As previously reported, Finland’s Pohjola is believed to be the funds’ cornerstone investor.
DRC has deployed more than half of its senior debt to date in north-west Europe. Its sweet spot is deals of between €20 million and €50 million in the UK, France, Germany, the Netherlands, Belgium and Scandinavia, targeting 60-65 percent loan-to-value across the office, retail, hotel and logistics sectors.
“We think senior debt offers attractive risk-adjusted returns to fixed income investors who are allocating to other credit classes, particularly public credit,” said DRC Capital managing partner Dale Lattanzio.
DRC entered the senior debt space two years ago and has continued to build up its exposure. It also manages separate accounts targeting senior lending.
“Banks are banking fewer of their clients with quite a number falling outside the definition of key clients,” Lattanzio says. “There has also been a dramatic pull back in the type of lending banks are willing to do in terms of asset type, geography and leverage. Banks are on a programme where they tend to be syndicators of debt which means smaller loans are less attractive than they were when banks held whatever they did on balance sheet.”
Aside from its senior strategy, DRC is also active in the high-yield space, where it has provided more than £1 billion of mezzanine, whole loans and bridge finance through its second and third debt funds. It recently provided a £60 million finance facility, which alongside existing senior debt held by the group, funded Aermont Capital’s £323.3 million acquisition of Pinewood Group, which owns iconic film studios near London.