German real estate bank HSH Nordbank and Vienna-based asset manager Aurelius Capital Management have established a joint venture, named Aurora Real Estate Partners, to create and manage a portfolio of high-yield real estate loans. The loans will be securitised as commercial real estate collateral debt obligations (CRE CDOs) and placed on the capital market. HSH said the loans - initially focused on Europe - will range from EUR 5 mln to EUR 50 mln each. The fund’s target size is EUR 300 mln.
German real estate bank HSH Nordbank and Vienna-based asset manager Aurelius Capital Management have established a joint venture, named Aurora Real Estate Partners, to create and manage a portfolio of high-yield real estate loans. The loans will be securitised as commercial real estate collateral debt obligations (CRE CDOs) and placed on the capital market. HSH said the loans - initially focused on Europe - will range from EUR 5 mln to EUR 50 mln each. The fund’s target size is EUR 300 mln.
A new mezzanine fund has been launched as part of the joint venture to meet the finance requirements of investors requiring a higher percentage of borrowed capital. HSH said the fund will provide subordinated loan tranches, as there is a growing demand for this in the market today.
Peter Rick, deputy chairman of the Hamburg-based bank's management board, said the cooperation with Aurelius Capital Management enabled HSH to widen the range of financing options it was able to offer professional real estate investors. 'At the same time, through the capital relief realised in this way, HSH is also expanding its options in the area of senior finance deals,' he said. Aurelius specialises in structuring collateralised debt obligations.
