ICG-Longbow, the real estate debt business of Intermediate Capital Group (ICG), expects to exceed last year’s lending volumes after deploying more than £750 million across its funds so far this year.
More than 60 percent was deployed through the firm’s whole loan-focussed Funds III and IV, followed by around 35 percent allocated through its senior debt programme and the balance through its development finance strategy. In total, the capital was invested across 34 deals with an average size of £22 million.
Speaking to Real Estate Capital, ICG-Longbow joint managing partner Martin Wheeler said that the firm is expecting to top the £850 million invested during the whole of 2014. “The pace has picked up,” Wheeler said.
ICG-Longbow said that it continues to raise capital across its senior debt and mezzanine/whole loan strategies. Around £150 million was raised during the last six months, including capital to top up Fund IV, which stood at around £365m as at May. The firm is aiming to have invested or allocated the capital raised so far for Fund IV by the end of the year.
There are no current plans to raise additional capital for the development finance strategy. The firm has so far made two investments for its existing UK residential development finance mandate. Around £70 million has been invested across the two deals, which have financed developments in Bristol and Southampton. The firm reportedly signed a £202 million mandate to invest in UK real estate development on behalf of sovereign wealth fund Abu Dhabi Investment Authority earlier this year.
ICG-Longbow’s Fund II, which had its first close in 2010, is now approaching the end of its five year life. It has returned more than 60 percent of investor capital through 13 exits, producing an IRR of 19 percent per annum at investment level.
Within Fund III, which had its final close in May 2013, there have been three realisations returning over £100 million of capital, which has been reinvested into further transactions, increasing both the underlying investment multiple and the duration of the fund.
On personnel, a replacement for Trevor Homes, the former partner who headed the senior strategy and left the company in August to lead Gatehouse Bank’s real estate lending business, is yet to be appointed, Wheeler commented.
ICG-Longbow has £2.3 billion of assets under management as at 30 September 2015.