Invesco Real Estate has taken over the European real estate debt business of GAM Investments, giving the fund manager global lending capabilities.
A seven-strong team, led by Andrew Gordon, have been transferred from GAM to Invesco, along with a US$300m (€250m) of assets held in two funds and a separate account.
The acquisition adds to Invesco real estate debt businesses in the US and Asia-Pacific, and comes amid efforts at GAM to reduce staff and costs.
Invesco has a 17-strong real estate debt team in the US overseeing $1.8bn of investor commitments, and it has three debt specialist in Asia-Pacific managing separate account mandates.
GAM acquired the European real estate debt business in 2015 from Renshaw Bay. At the time, it was led by former JP Morgan managing director Jon Rickert, who has since decamped to Man Group as head of European private credit.
Andy Rofe, managing director for Europe at Invesco Real Estate, said the company had been looking for potential corporate acquisitions and had “run the slide rule over a few opportunities” in the past couple of years.
“What we wanted to do was have the capability of investing in the real estate debt universe in Europe, which we didn’t have previously,” he told IPE Real Assets.
“It is a natural adjunct to the business. We have that full capability of public, private, equity and debt in the US, and wanted to complete that offering to clients in Europe as well.”
All 22 of GAM’s real estate debt investor clients will move across to Invesco, of which a third already have existing relationships with Invesco broader investment business.
Rofe said GAM’s existing debt fund, which was launched in 2018, still had “some dry powder” to invest today.
“We’ll be working over the next few months to talk to our client base and hopefully, early 2021, come out with a defined strategy,” he said.
Rofe said “dislocation in the market” caused by COVID-19 would lead to a further “pullback from traditional lenders”, accelerating the growth in non-bank debt in Europe since the global financial crisis.
“That creates an opportunity for lenders who are best positioned to identify and exploit those funding gaps and be able to provide liquidity to the market,” he said.
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