Apollo sets up Europe commercial property debt unit

US private equity fund manager Apollo Real Estate Advisors has created a new European commercial property debt unit to fill the gap 'as others retreat from market'. According to the Financial Times, Apollo is in the process of raising a fund of up to $1bn to invest in discounted property debt from banks no longer able to securitise loans.

Apollo said on Monday it has hired a debt finance expert team led by David Ferguson to focus on European Senior Debt Securities. The new team, which formerly worked for Stoneleigh Capital, will operate from Apollo's European headquarters in London. Apollo has also poached former head of CMBS trading John Beaman from Lehman Brothers, who will work from the group's New York office.

'We have the debt origination, structuring and execution capability and Apollo has the real estate investment and asset management expertise in Europe and a complimentary real estate debt business in the US. Together we have the platform to execute our business plan. We have already identified a number of robust opportunities in Europe which has heavily underlined the logic and strength of this merging of skills,' Ferguson said in a statement.

Ferguson was the founding managing director at Stoneleigh Capital, which is specialised in European Real Estate debt and was formed as a joint venture between Ferguson and CDP, the Canadian Pension Fund. In addition to Ferguson, Richard Williams, Julien Roy-Decary and Felicity Healey have all joined Apollo.

Apollo's European investment team has recently closed its third dedicated European fund with approximately $1.4bn of committed equity. The fund is managed by Apollo's existing team of 24 professionals. Since turning to Europe in 1995, Apollo has invested around $13bn (EUR 8.4bn) in retail, office and logistics assets across 14 countries.