Investment manager Downing and private equity firm Pollen Street Capital have entered a partnership to provide finance for small to medium-sized UK housing developers and to encourage greater innovation and competition in the market.
As part of the arrangement, Pollen Street Capital has acquired approximately £30m (€32.2m) of Downing’s existing loan book and is providing an additional funding line for future residential development finance and bridging deals for developers.
Downing already provides funding for small to medium-sized enterprises (SMEs) and currently has £470m of assets under management in property-backed deals, as well as having committed facilities of more than £150m to residential developers through its property finance division.
Pollen Street Capital, a private equity and credit focused manager, has invested more than £1.1bn in senior real estate debt during the past three years through its partnership model with property lenders.
Parik Chandra, partner and head of property finance at Downing, said: “Our partnership with Pollen Street Capital gives us the ability to provide a broader offering and develop a stronger presence in the property finance market.
“This deal will also allow us to realise our bold plans for supporting SME developers and the great work they do in tackling the UK’s housing shortage in 2021 and beyond.”
Howard Garland, partner at Pollen Street Capital, said: “We are delighted to announce this new funding partnership with Downing, which we expect will become one of our key real estate partners going forward.
“The high-quality focus and market expertise of the Downing property finance team fits well with our real estate strategy where we look to form funding partnerships with experienced lenders in the sector. We also see a number of broader synergies between our businesses and look forward to working with them.”