NREP, the Copenhagen-based private equity real estate firm focused on investing in the Nordics, is deploying resources to increase its presence beyond the region.
Last month, the firm appointed Emanuele Bena as its London-based head of capital markets. Bena is NREP’s first non-Nordic partner and his role is a newly established position. The firm is opening an office in London, its first outpost outside the Nordics for transaction purposes. It also has an office in Luxembourg, where its real estate funds are domiciled.
Bena joins from JPMorgan where he was an executive director in its EMEA real estate and lodging investment banking team.
NREP’s decision to expand its regional presence beyond the Nordics is driven by its wish to increase scale operationally. This reflects the growing size of its real estate strategies, and the consequent increase in its financing requirements.
The firm is currently in market with its fourth real estate value-add vehicle, NREP Nordic Strategies Fund IV. If NREP is successful in raising the €1.25 billion targeted for the fund, which was launched in September 2019, it will not only be the firm’s biggest-ever vehicle, but also the largest within the Nordics market. Its predecessor, Nordic Strategies Fund III, closed on €904 million in May 2018.
Explaining the rationale behind the hire, Jani Nokkanen, partner and chief investment officer at NREP, says: “Traditionally, here in the Nordics, most property deals are financed by local banks. Within NREP’s portfolio as well, around 99 percent is financed through normal bank mortgages, of which the majority are with Nordic banks. The leverage here is quite cheap and it is a very efficient process.
“However, when you grow large enough, you need more debt financing partners. This not only includes banks, but also structured finance, bonds and credit funds, and those are mainly located in Germany and London. We need those partners for fuelling our growth in the future.”
The need for more debt financing partners also comes from the firm’s ambition to pursue more mergers and acquisitions from its fund capital. Nokkanen says NREP wants to do more corporate transactions and has been actively looking at buying both private or listed real estate platforms or companies.
It kickstarted this process with Nordic Strategies Fund III, through which it acquired a 50 percent stake in Tetris, a Danish development company with a senior housing product ready to scale, last year. That was the firm’s first corporate mergers and acquisition transaction.
“Emanuele has been with JPMorgan for 15 years and he will add substantial capital market experience, as well as valuable support for structural and M&A-type deals,” added Claus Mathisen, the firm’s chief executive.
Nordic Strategies Fund III and Fund IV have both focused on investing in rental apartments, student housing, senior living and logistics. In terms of geographical remit, the documents for both funds contain investment limitations whereby up to 10 percent of the capital can be invested outside the Nordics.
“Within the segments we operate, we have been looking at transactions in the Northern European region several times,” said Nokkanen. “Our funds have a restriction on investment outside the Nordics, but we do see investments that are attractive within the boundaries of this.”