HIG Capital is expanding the debt investment capability of its European real estate team with the hire of two new directors, Real Estate Capital has learned.
The US-owned hedge fund has recruited Natale Giostra, formerly of CNM Estates, and Stelios Theodosiou who worked in Deutsche Bank’s London-based European special situations team.
The pair will work closely with Graham Emmett who moved to HIG at the start of the year as a managing director, bringing both debt and equity investing experience.
HIG’s other European real estate head and managing director is Riccardo Dallolio who joined in early 2015 from AXA. The firm invests across Europe and has made 32 small/mid cap, value-add investments since the start of 2013, in both equity and debt.
Last week, the business announced it had completed a regional UK structured debt investment, financing York Ventures’ acquisition from Aviva of the freehold of Yorkshire House in York and its subsequent conversion from office use.
The 55,000 sq ft, empty 1960s building has planning consent for residential, underpinning HIG’s loan. But the client has applied to turn it into a hotel and has a pre-let agreed on a long lease with Malmaision which would see it converted instead into a 163-room hotel and 30 serviced apartments.
HIG makes preferred equity or mezzanine loans, or whole loans and sells down the senior tranche.
The deal is HIG’s first structured debt investment in the UK and Emmett said they would like to do more, similar deals where the loan “is underpinned by strong real estate fundamentals.”
He said HIG has completed “a couple” of debt transactions in Spain and sees more opportunities there and in other parts of southern Europe like Italy and Portugal where the business has expertise and a track record. “We think there are more opportunities there in debt to make the returns we seek”, he said.
It is thought that Giostra, who worked at Gatehouse Bank and CBRE before a stint at CNM raising capital for its projects, will work on financing HIG’s equity acquisitions as well as sourcing new deals with the rest of the team.
HIG has €18 billion of equity capital under management internationally, in private equity, debt and real estate.