AXA IM - Real Assets expands debt platform with Quadrant buy [updated]

AXA Investment Managers - Real Assets has expanded its global debt platform with the acquisition of a $9.4bn (€8.18bn) US commercial mortgage loans business from Quadrant Real Estate Advisors.

The €77bn asset manager said it has agreed, pending regulatory approval, to buy one of Quadrant’s US lines of business including a real estate debt team and will take over Quadrant’s US commercial property mortgage loan mandates.

As part of the deal, 24 members of Quadrant, including five of the founding partners, will join AXA IM - Real Assets.

Established in 1993 by Kurt Wright and Walt Huggins, Quadrant primarily focuses on debt investments collateralised by commercial real estate and has investment capability in the US, Ireland and the UK.

AXA IM - Real Assets said the transaction forms part of its ongoing strategy to expand internationally, and particularly in the US.

AXA IM - Real Assets’ current managed assets include €58.6bn in direct property and infrastructure and €14.8bn in real asset finance. The acquisition is expected to lift AXA IM - Real Assets’ loan portfolio to $20.5bn (€18bn), and its total debt platform including infrastructure finance to $28bn.

Isabelle Scemama, the CEO of AXA IM - Real Assets, said the acquisition will enable the company to expand its real estate debt platform from a European to a global level.

“It will also be a major milestone in our goal of creating one of the largest and truly global real assets investment and management firms.

“The transaction will also further strengthen our ability to fulfil clients’ evolving and global requirements by taking a 360-degree approach to investing in real assets across different geographies and sectors, through opportunities in equity and debt, as well as via private or listed instruments.”

Steve McCarthy, the head of North America for AXA IM - Real Assets, said: “By adding $9.4bn of assets under management and bringing 24 high-calibre real estate finance professionals into our team, this transaction will be significant for our growth in the US.

“By combining the expertise and local knowledge of the lift-out team with our own large-scale resources and experience as well as the AXA IM - Real Assets’ brand, we will be very well placed to significantly expand our US debt business, while at the same time continuing to provide our collective clients with the commercial real estate financing solutions to which they are accustomed.”

Wright, who is also the CEO of Quadrant, said: “Quadrant Real Estate Advisors will continue to devote its resources to delivering excellent results for its valuable, strategic clients via originating and managing commercial property debt in the US and Europe.

“In addition, Quadrant’s long track record of excellent performance in the US is now being replicated in Europe; Quadrant is the dominant non-bank commercial property lender in the Republic of Ireland and has achieved excellent results in Great Britain.”

The move by AXA IM - Real Assets’ follows similar acquisitions of debt fund platforms by real estate fund managers.

Last week, the $60bn LaSalle Investment Management moved into the US property debt sector with the acquisition of Latitude Management Real Estate Investors (LMREI) by agreeing to buy an 80% stake in the $1.2bn debt fund business of LMREI.

Earlier this year, The €16.2bn manager Savills Investment Management also broadened its real estate investment offerings with the acquisition of an initial 25% stake in DRC Capital with the option for a full takeover in 2021.

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