European investment manager GWM is seeking to raise up to €500 mln of equity for a new European investment strategy focused on property-backed senior debt, PropertyEU has learned.
The company, which manages €4.5 bn of assets, already raised €100 mln at the fund’s first closing in August last year and is preparing to carry out a new close in the fourth quarter of this year, managing partner Gennaro Giordano told PropertyEU.
‘This is a perfect product for investors who typically invest in debt instruments, which currently offer returns close to zero. It has low risk, and is attractive for insurance companies, pension funds, and all those investors looking for a stable recurring income with a margin over public market debt instruments with a similar levels of risk,’ he said.
The Commercial Real Estate Debt Opportunities Fund (CREDO) fund provides senior debt with LTVs of 60-70% and secured by any type of real estate assets across Europe, with the exception of greenfield developments. The vehicle made its first deal earlier this year with a €67 mln senior acquisition and capex financing to Angelo Gordon for a major logistics portfolio near Milan. The portfolio includes both stabilised and development assets, comprising 160,000 m2, that range from traditional 3PL to cold storage and last mile logistics.
The vehicle is currently looking at new deals in France, Spain and the Benelux, said Giordano. ‘With this fund we are seeking to tap into what we believe is a funding gap in the lending market for tickets between €20 mln and €50 mln,’ Giordano told PropertyEU. ‘This segment of the lending market is not adequately covered by the existing banking system which is seeing a retreat by traditional banks which have adopted more restrictive lending criteria, and limited appetite of investment banks which are hunting for much larger deals,’ he noted.
With offices in London, Luxembourg and across Italy, GWM mainly focuses on property and debt investment with a value-add and opportunistic risk return strategy. Earlier this year, the group, together Italian lender Unicredit and US investor Pimco, emerged as the buyers of the €908 mln Sandokan 2 securitisation, which is backed by secured loans originated by UniCredit, involving 58 borrowers.
The notes were issued by Unicredit’s Yanez special purpose vehicle as part of a larger programme which is due to reach a size of €2 bn in 2021.