Former Man Group and Octopus Real Estate executives Matthew Pritchard and Gavin Eustace, backed by funds managed by Oaktree Capital Management have launched a new development lending platform targeting £3 bn (€3.4 bn) of new financings.
The company, named Silbury Finance, will focus on the structurally undersupplied UK living sector, providing bespoke senior development finance solutions for property professionals active in the structurally undersupplied UK residential, retirement and student accommodation sectors.
Launched against the backdrop of the Covid-19 pandemic, Silbury was founded by Matthew Pritchard, formerly head of European Real Estate Debt at Man Group, and Gavin Eustace, formerly head of Residential Development at Octopus Real Estate. The platform will underwrite loans typically in the £10 mln to £150 mln range with an LTV between 60 and 70%, and is targeting half a billion pounds of lending in 2021 and up to £3 bn of lending over the next six years.
Silbury is seeking to capitalise on growing borrower appetite to partner with experienced property lending professionals to access flexible bespoke loans.
It represents the latest Oaktree platform created to seek to take advantage of a dislocation of traditional financing sources to create a market leader in an attractive market segment.
Commenting on the move, founding partner Matthew Pritchard noted that middle-market residential developers continue to be ‘hugely underserved by the lending markets’. ‘We expect the current uncertainty to only exacerbate this trend further. Swathes of UK lenders, comprising both the high street banks and alternative lenders, have retrenched due to uncertainty generated by the Covid-19 pandemic and are committed to managing their current loan books. Large debt funds continue to seek the higher returns available from the large single ticket loans.’
Founding partner Gavin Eustace added: ‘Against a structural backdrop of undersupply of residential real estate in our target markets, the case for debt financing remains strong and we look forward to closing on our near-term pipeline of opportunities, employing a prudent and disciplined approach to lending.’
Pablo Velez, managing director at Oaktree, added: ‘We view the challenging economic backdrop as a compelling entry point to the sector and plan to take full advantage of the lack of a legacy book to focus on expanding quickly. UK real estate, in particular senior secured lending collateralized by residential developments, offers an attractive combination of risk and returns, and we expect this to continue for the foreseeable future.’
Prior to launching Silbury, Pritchard spent six years as head of European Real Estate Debt at Man Group, before joining Oaktree as a Senior Advisor. Eustace was previously head of Residential Development at Octopus Real Estate, where he was responsible for over £1 billion of lending.
