Invesco Real Estate has broken into European debt investing after acquiring the real estate finance business at loss-making Swiss asset manager GAM.
US-owned Invesco has been a lender on real estate in North America since 2013 and had been looking for some time to establish an operation in Europe.
The GAM CRE finance business comprises a European loanbook valued at $300 mln (€250 mln), a team of seven, and 22 mainly UK institutional investors in two funds and one separate account.
While parent GAM Holdings has issued a series of profit warnings over the last two years after a scandal in 2018 which saw its star fixed income manager fired, the small real estate debt business ‘has a strong track record of success’, Invesco said.
The former GAM debt team is led by Andrew Gordon. The previous co-head with Gordon, Martin Farinola, left in February and in June joined Brookfield to expand its European real estate debt investing.
GAM took over the debt business in 2015 by buying Renshaw Bay, a boutique backed by the Rothschild family’s RIT Capital Partners and founded by former JPMorgan executive Bill Winters who hired banking colleague Jon Rickerts in 2012 to set up real estate financing. Rickert left GAM to join Man Group in February 2019.
GAM had two separate accounts for real estate debt one of which was for annuity provider Guardian Financial Services, now part of ReAssure. The other has not been disclosed.
Its first debt fund raised £356 mln (€392 mln) in early 2015 and made 25 investments; the second debt fund was smaller, raising about €220 mln in 2018 and targeted a 10% return.
Invesco Real Estate said a third of GAM’s real estate debt investor clients already have relationships with its business and that it planned to develop its debt offering further.
It added that the acquisition was a ‘hugely important milestone’ enabling it to satisfy client demand for debt as well as equity, completing its European real estate capabilities.
Gordon will report to Andy Rofe, Invesco’s head of European real estate.
