AXA set to double loanbook via Norges mandate victory

Co-investment with Norway’s wealth fund could take book size to €15bn

AXA Real Estate’s European senior debt book could double to €15bn after the company won an investment mandate from Norway’s sovereign wealth fund.

Isabelle Scemama, head of real assets finance at AXA Real Estate, said the new real estate debt co-investment programme between AXA’s existing clients and Norges Bank Investment Management “consolidates the leading position we already have” and positions the platform “as the largest underwriter in the European market.

Scemama: “This participation increases the size of loans we can underwrite to €600m”
Scemama: “This
participation increases
the size of loans we can
underwrite to €600m”

“We will continue to increase the average size of our investments,” she added. “When we started we were looking at loans below €50m, then in excess of €50m. Now, with this participation, it increases the size of loans we can underwrite to €600m.”

Since its programme started, AXA has raised €7.5bn from in-house AXA insurance companies and external institutional clients, which is substantially invested.

Scemama declined to say how much Norges would like to invest, but said the co-investment partnership meant the loanbook “could be at €15bn, although I don’t know how long it will take”.

AXA’s programme targets senior investment loans only and the breakdown of the portfolio is roughly one-third debt secured on offices, mainly in London and Paris; one third retail, mainly major shopping centres; and one third against other assets, including residential and logistics.

Last year Scemama’s team invested “between €2bn and €2.5bn”, including the acquisition of an €800m loan portfolio from Société Générale. So far this year the team has invested €1.8bn out of a €2.5bn target.

The investment manager did not bid on Eurohypo’s £2.7bn UK loanbook when it was put up for sale at the start of the year. But the new partnership might make it more likely to bid for any future performing loanbooks sold.

The Norges mandate is one of around a dozen from sovereign wealth funds, insurance companies and pension funds that have been in the market this year, sources say.

CoStar reported this month that Guardian Financial Services has awarded a £350m separate account mandate to Renshaw Bay, while in July, Pramerica’s Pricoa Mortgage Capital won a £500m investment mandate from Friends Life.