France sees string of new debt platforms

French investment managers are leaping into the debt arena in a bid to take advantage of a shortage of real estate financing across the country.

Asset manager Amundi Real Estate has been authorised by French stock market regulator AMF to manage property debt funds and is currently marketing a new vehicle which will invest alongside banks in new senior loan origination and primary underwriting.

Nicolas Simon, Chief Executive of Amundi Real Estate, told PropertyEU that the company is looking to raise equity of €300 mln for the vehicle, which will seek to build up a portfolio of 10-15 loans in total, with a loan to value of 50% to 60% backed by core and core plus real estate.

The fund, which will mainly invest in France, will be managed by Stanislas Henry, head of Institutional Funds and Solutions at Amundi Real Estate. Simon: 'The fund will not have much flexibility in terms of drawdown but it will provide a long term commitment of around seven years.'

It will be positioned on the upper limit of the core space to differentiate it from the low margin strategy of traditional lenders. 'We do not want to be competing with German banks eligible for pfandbrief refinancing,' he explained.

Simon said the fund will provide investors with a good risk premium of 250-350 basis points. ‘It is a good proposal for investors, because the risk is limited compared to equity investments and margins are higher.'

Amundi is the latest investment manager moving forward with a real estate debt strategy. Last month, fund manager La Française REM raised €150 mln of equity at the first closing of its senior debt fund, LFP Créances Immobilières, while insurance group Scor has just hired Gilles Castiel, the former head of acquisition and origination at Eurohypo France, to lead its foray into the debt market.

Similarly, La Banque Postale Asset Management (LBPAM) has just raised €500 mln for its first real estate debt fund, led by René Kassis. Contrary to most other French vehicles, the fund will also look for investments abroad, particularly in Germany and in the UK.