Edmond de Rothschild has recruited pbb’s management board member Bernhard Scholz as an advisor to its recently launched real estate debt strategy.
Scholz, aged 62, will also become a member of the credit and investment committee of Edmond de Rothschild REIM (Germany). At pbb, he was responsible for real estate financing; and before then he was a member of the management boards of Hypo real estate h olding and Münchner Hypothekenbank.
Edmond de Rothschild announced last week that it had combined its three European real estate businesses to create a single, integrated investment management platform to be known as Edmond de Rothschild Real Estate Investment Management. The Swiss family-run investment house also told PropertyEU that it is planning to launch its first real estate debt fund later this year. The new fund - Edmond de Rothschild’s first such vehicle – is expected to raise equity commitments over €300 mln potentially reaching a size of up to €1 bn.
It will cover the full debt load including whole loans, mezzanine, junior as well as preferred equity enabling borrowers to source the entire financing from a single source. Targeted returns will be between 6 and 10%.
The fund will be managed from Luxembourg, and will focus on the Eurozone countries, with investments led from Frankfurt, where the company recently hired Deutsche Mittelstand Real Estate's former CEO Ralf Kind as real estate debt. Over time the debt offering is also planned to be expanded with a more conservative senior debt strategy to replicate the group’s infrastructure debt platform which currently manages €2.6 bn of assets.
Ralf Kind, head of Real Estate Debt at Edmond de Rothschild, commented: ‘Having Bernhard as one of the leading financing experts in Europe on board will be another step in the build-out of our European real estate debt business. Bernhard has tremendous experience in risk management across different loan products and countries.’
With 120 professionals working from 9 European offices, Edmond de Rothschild manages real estate assets worth around €11 bn and is led by Pierre Jacquot, the founder of the Swiss Orox Asset Management which was taken over by Edmond de Rothschild in 2012.
Commenting on the merger, newly-appointed CEO Jacquot told PropertyEU in an interview that the operation will allow Edmond de Rothschild to reach a ‘critical size’ and become more visible on the European investment management scene. ‘We believe that with this operation we have reached a critical size and we will become more visible for institutional investors, which is one of our main targets at this point. We will be covering the main European markets and our clients will be able to benefit from this geographic diversification by gaining access to investments in other countries.’
The move will also allow the group to adopt a unified approach, he added. ‘We are part of a regulated financial institution and this merger will allow us to be consistent across the board in terms of corporate governance, administration and compliance.’ The group, which specialises in private banking and asset management, has over €150 bn of assets worldwide.
Expansion drive
While there are currently no plans to expand to other markets, Jacquot said the main priority is to grow the asset management platform with the launch of new strategies and products in the countries where the company is already active. ‘Our target is to double real estate assets under management in 3-5 years’ time,’ Jacquot told PropertyEU.
‘Of course the sector is benefiting from the low interest rate environment but our growth plans reflect more our conviction around long-term responsible and impact investing. We believe in strong, reliable sectors and will be focused on strategies driven by sustainability and generating a positive impact on society and the environment.’
In terms of sectors, the group will be targeting three main strategies, the residential sector and the creation of new homes; light industrial and urban logistics and lastly, secondary offices to be redeveloped and converted to the latest environmentally-sustainable standards.
Last year the group launched a European last-mile logistics fund with a core-plus risk profile.The fund aims to deliver an average net income return of more than 6% per annum over a 10-year period.
