LGIM poaches two experienced originators for senior lending campaign
Legal & General has poached a team from Aviva Commercial Property Finance to launch its drive into senior lending. Ashley Goldblatt, head of real estate finance at Legal & General Investment Management, has hired Steve Boyle and Graham Rouse from rival Aviva. Goldblatt, previously in LGIM’s fixed-income division, was appointed late last year to draw up a strategy to take the UK’s fourth largest insurer into originating property debt.
Market sources had wondered how LGIM would attempt to follow other insurers into an activity traditionally associated with banks and make it work for an institutional fund manager. Boyle and Rouse, who will join in July, are both experienced originators. Aviva, which has a £10bn UK commercial property loan book, has been originating deals for over 25 years, taking assets on its balance sheet that match its long-term annuity liabilities.
Goldblatt said L&G’s annuity business will be the property lending team’s “initial client” and loans would not necessarily be of a longer maturity. With more than half the banks once lending on UK property still out of the market, or shackled by lack of balance- sheet capacity, insurance groups have shown increasing interest in owning property debt or making loans directly.
Other reasons for their interest include to supplement returns from fixed-income investments and because the Solvency II regulations are expected to make holding debt attractive relative to investment in other asset classes. MetLife, a long-time investor in property debt in the US, has made new loans in the UK in the past year and AXA has been taking participations in deals originated by banks. M&G Investments’ head of real estate finance John Barakat told Real Estate Capital last month that the insurer “had an increasing appetite for senior mortgage risk”.