Appleton Capital Management is setting up a fund to acquire distressed real estate loans in Spain with a nominal value of more than €1bn.
The Dublin-based alternative investment manager hired former Swedbank and Morgan Stanley banker Anders Engdahl earlier this year to lead the strategy with the help of Spanish lawyer Pablo Anderson.
The company is targeting €200m from investors for the Icciona Capital Partners fund to buy non-performing loans from Spanish banks at steep discounts before eventually selling the underlying properties.
While the recent surge in institutional real estate investment in Spain has been largely limited to income-producing properties in Madrid and Barcelona, Icciona Capital Partners will target the southern Andalucia region.
Head of investor relations Kasper Eriksen said Andalucia has often been seen as unregulated and difficult to do business in. “Few have wanted to enter the market at an institutional level because of lack of local knowledge, execution and exit capabilities,” he said.
“We have structured our business to address this, and expect to raise the level of professionalism in this area.”
Eriksen added: “Since the crisis, Spanish banks have amassed some €200bn of distressed real estate loans on their balance sheets and, out of that, Andalucia accounts for €30bn to €40bn.”
Engdahl, who used to head the Nordic financial institutions investment banking business at Morgan Stanley and who also worked for Goldman Sachs and Credit Suisse, will work with ex-colleague Niklas Helin.
The target size for the Ireland-domiciled fund is €200m, which will enable it to acquire a nominal portfolio of around €700m to €1.3bn.