Rockefeller propels Europa back into mezzanine waters

Parent firm funds mezzanine arm’s launch with around £100m firepower

Europa Capital Partners is returning to UK mezzanine lending, with capital from parent Rockefeller Group.

Noel Manns, a founder of Europa who was involved with Property Mezzanine Partners in 1995, will chair the new Europa Capital Mezzanine venture, which he said plans to make about 10 loans of £5m-£20m each, implying Rockefeller has made about £100m available.

Europa has hired Mike Birch and Selina Dicker to run the mezzanine business along with Europa’s Tim Turnbull, who will be responsible for under-writing the property. Birch will lead the business and Dicker, who left NAMA in the summer and previously worked at Rothschild and Capmark, will handle loan execution.

Manns said: “The property fundamentals are important and the whole deal must work for both the borrower and the mezzanine and senior lenders. We will treat borrowers as partners, as we do in our value- added funds – that is our style.”

He said borrowers were likely to be “entrepreneurial property people. I think we’ll be backing some people we already know.” ECM will target deals yielding 10-12%, primarily from a coupon plus fees, rather than rolled-up interest, lending at loan-to-value ratios of up to 80%.

Property Mezzanine Partners invested in and profitably realised 11 mezzanine deals in the 1990s. Manns said he expected the window for investing to be open for longer in this cycle.

It is thought other investors may join the business later. Europa held a first closing on €150m for a fourth follow-on fund a few weeks ago, with Los Angeles County Employees Retirement Association as a cornerstone investor. Manns said Europa Fund III is fully invested.