Term Sheet: BNPP AM’s fundraising, Mount Street and HSBC’s mega-mandate, Waypark’s debut

BNP Paribas Asset Management targets senior and junior strategies through its fundraising; Mount Street and HSBC take on a standout servicing mandate; Waypark Capital’s entrance signals continued investor demand for real estate debt; and more in today’s briefing, exclusively for our valued subscribers.

They said it

“There’s huge opportunity for private debt within real estate to succeed”

Sophie van Oosterom, global head of Schroders Capital Real Estate, in an interview with affiliate title PERE for its July/August 2022 edition, says debt is a logical component for the asset manager’s real estate platform. Read the full interview here

What’s happening

BNPP AM’s haul
BNP Paribas Asset Management will be multitasking in the coming months, as it seeks to deploy €700 million of fresh capital into the European senior real estate loans marketplace while capital raising for a junior debt vehicle. The investment management arm of French banking group BNP Paribas has been buoyed by €200 million more capital than it originally targeted for its second senior commercial real estate debt fund and expects “firm commitments” for its junior vehicle to be in place by the autumn.

Christophe Montcerisier, head of real estate debt at BNPP AM, is not fazed by the task of deploying its recently raised capital. He told Real Estate Capital Europe that caution from banks would leave the door open for lenders that could provide the additional amount of debt required to maintain former levels of leverage across the market.

A servicing mega-mandate
A major servicing agreement was announced this week. UK bank HSBC and London-based loan servicer Mount Street agreed a 10-year deal to service the £50 billion (€59 billion) of assets held by Aviva Investors’ real assets business. As part of the mandate, HSBC will take on fund administration duties, while Mount Street will look after the manager’s loan portfolio, understood to be around £30 billion across the business, including real estate debt.

The agreement is a major example of an asset manager in the real assets space outsourcing such functions. Mount Street’s chief executive, Paul Lloyd, said the administrative burden on managers has increased as investors demand more access to data. “We’ve been trying for many years to get lenders and asset managers to realise that outsourcing is a value-for-money, cost-efficient thing to do,” he added. Read more about the deal here.

Capital keeps flowing
More investor capital has been earmarked for the real estate lending market – in this case for the sub-£20 million (€24 million) part of the UK market. Aeon Investments, a London-headquartered credit investment company, has entered a £450 million agreement with newly launched lending platform Waypark Capital, through which Waypark will provide loans up to 75 percent loan-to-value, for acquisition, refinancing and asset upgrades.

Oumar Diallo, chief executive officer of Aeon, made clear his belief in the commercial real estate sector, despite the challenging economic backdrop. “We firmly believe that rigorous asset selection and loans with prudent LTVs and conservative debt coverage ratios will ensure CRE debt remains an asset class with sound risk/reward ratios,” he said. Read more here.


The need for diversity
European property companies are more focused on diversity, equality and inclusion following the pandemic, says a new study by INREV and six other industry bodies. Policies around visible and non-visible disabilities were in place in 81 percent of organisations surveyed, while introducing flexible working and paternity leave policies are also high on the agenda.

Tackling the predominance of “white, male and stale” employees was another mission for many, with those surveyed saying they were tightening recruitment processes that were “largely led by word of mouth and employee referrals”. “Employees need to understand how using ‘gut feeling’ in a hiring decision is not an appropriate methodology and almost certainly negates the creation of an inclusive workforce,” concludes the report.

People moves

A critical first hire
Westwind Capital, a new London-based manager formed by ex-Harrison Street executive Daniel Gorzawski, has made its first hire. Mark Terry [his LinkedIn here], who arrives after nearly 11 years at Tristan Capital Partners, where he was funds chief financial officer, has joined as joint chief operating officer and CFO.

Gorzawski said it was a deliberate decision to make the joint CFO/COO role his first hire because of the European regulatory environment, which has become more complex post-Brexit. Given the amount of focus that investors and other counterparties place on regulatory compliance, particularly for first-time fund managers, hiring the right person for the role was a critical first step as the new firm seeks to build its team, Gorzawski said. [Read PERE’s exclusive coverage of the hire here.]

LaSalle bulks up
LaSalle Investment Management this week announced two key hires for its European debt and value-add strategies division. The manager has appointed Rosanna Phillips as managing director in the team, and Kevin Kong as director of acquisitions for value-add investments.

Phillips, a lawyer, was most recently general counsel at Intriva Capital, an investment firm focused on asset-backed special opportunities in Western Europe. Kong joins from UBS Asset Management’s multi-managers real estate group, where he led coverage of non-fund investments. Michael Zerda, head of debt and value-add strategies at LaSalle, said the new appointments would bring experience and market knowledge to the business, which LaSalle is aiming to grow.

Data snapshot

Sheds break records
The first half of 2022 saw the highest take up of logistics space in the UK on record, with 22.6 million square feet snapped up by occupiers, according to CBRE. Lenders are wary of tight yields in the sector but the property consultant’s figures show tenant demand is strong, with vacancy rates dropping to a new low of 1.18 percent.

Loan in focus

Holiday Inn Dublin Airport: Barings financed the hotel

Getting its Barings
Investment manager Barings is growing its European real estate debt platform, this week leading a €70.1 million syndicated investment facility secured by the Holiday Inn Dublin Airport Hotel on behalf of hotel owner JMK Group. Debt adviser Brotherton arranged the financing and brought Barings in to lead the four-year facility, which has a 62.5 percent loan-to-value ratio and refinances existing construction debt from UK-based lender Fairfield Real Estate Finance. The loan, split between a senior loan from Barings and junior financing from Fairfield, demonstrates Barings’ appetite for loans that fit this profile, says Chris Bates, managing director and head of European real estate debt originations. “As our loan book expands, we’re eager to identify further investment opportunities,” he said.

Today’s Term Sheet was prepared by Daniel Cunningham, with contributions from Lucy ScottEvelyn Lee and Samantha Rowan