Pluto Finance, the residential development lender, has expanded its capital base with the backing of funds managed by private equity firms Blackstone, Clearbell Capital and some major European institutional investors.
Pluto Finance, the residential development lender, has expanded its capital base with the backing of funds managed by private equity firms Blackstone, Clearbell Capital and some major European institutional investors.
In its second fundraising in a year, Pluto Finance said it has raised £94 mln (€115 mln) of equity, in addition to the £100 mln raised in May 2013. This gives the firm the firepower to lend £360 mln to residential development schemes in London and the south of England over the next four years as capital is recycled once developments are completed.
Pluto Finance provides developers with stretched senior loans of up to 90% of the cost of the development, with a minimum loan size of £10 mln.
The equity raise represents a much-needed injection of capital into a sector which has been starved of traditional bank finance in recent years, according to Pluto Finance CEO Chris Philp.
'We are delighted to have doubled our equity footprint. £360 mln is a significant contribution to funding residential schemes, and, by offering up to 90% loan to cost, we are helping developers make their equity go further,' he commented.
According to estimates from the UK Department of Communities and Local Government, the country needs to build 235,000 new houses per year to meet demand. In 2013, only 122,590 new homes were started.
Over the past 10 months, Pluto Finance has granted stretched senior loans to fund schemes with a gross development value of £170 mln. Transactions included a loan of £24 mln for a scheme in Surrey Quays in south east London and a loan of £12 mln for a scheme in West Hampstead, north London.
In addition to stretched senior loans, Pluto Finance also provides mezzanine loans for projects with a total cost of less than £10 mln. In the last three years, Pluto Finance has provided mezzanine loans to projects with a gross development value in excess of £290 mln. The mezzanine loans will continue to be available for projects in London and the south, the company said.
Established in 2004 by Chris Philp and Justin Faiz, Pluto Capital operates in the UK and Europe. In the UK, the company provides residential development finance for developers through Pluto Finance. In south east Europe the company manages a development fund, Pluto Developments, which is active across a range of sectors, from city centre residential and coastal holiday homes to retail and commercial projects.
