IGC-Longbow is on course to complete investment of its inaugural £102m listed senior debt fund by early 2014. The fund, which was launched last January, has closed five senior loans totalling just under £37m in the past few weeks, taking it from 50% to 85% invested.
With a couple of further deals in the pipeline, Longbow will meet the 6% annual returns it promised its retail investors. In the latest deal, the fund provided Raees International with a £13.25m, five-year loan secured against a 25-strong portfolio of London retail and residential assets.
It has also lent £7.2m against a South East London mixed retail/residential portfolio owned by Richmond Trust. In the Midlands, the fund has written a £6.56m loan for Hulbert Properties’ industrial portfolio.
In addition, it has lent £8.6m and £1.3m to Halcyon Nominee and Cararra Nominee respectively on two separate ground rent portfolios linked to industrial assets nationwide and a single office property in the North.
Each of the first-charge loans is for a five-year term. The fund has made eight loans so far totalling £87.25m, with an average loan-to-value level of 61% and an interest coverage ratio of 165%; the aver-age coupon is 7.28%, excluding Longbow’s costs and fees.
The fund is on course to meet its 6% returns target by targeting areas of the market where finance is tighter and charging more than banks typically would, offering finance across the UK for good-quality assets but where, for example, lease lengths are short.