M&G’s former head of real estate debt investing John Barakat has launched a new business with two close associates.
A year after he left M&G, Barakat has reunited with Peter Foldvari and Jamil Farooqi to launch Girona Partners, based in St James’s in London. The trio are all shareholders in the new company.
Barakat, a former investment banker at Goldman Sachs, is well-known in European real estate lending as one of the first to successfully set up an alternative lending platform after the global financial crisis.
He joined M&G Investments in 2009 where he was able to lever the investment giant’s heft and client base, including Prudential Assurance, to launch one of Europe’s first funds specifically for private real estate debt.
The debut vehicle’s initial raise in early 2010 was only €140 mln but by the time he left in April 2021, the business had many third-party clients for whom it was investing circa £2 bn a year.
Barakat focused on offering borrowers a one-stop shop with loans across any part of the capital stack, from senior to mezzanine, and on holding the loans to maturity.
Foldvari and Farooqi worked with Barakat at M&G from the start. Foldvari was also at Goldmans while Farooqi joined from Barclays.
Non-bank lenders have steadily increased their share of the real estate lending market since that time. The latest Bayes University UK commercial real estate lending report published last month found that, in the UK, they now have a third of the entire origination market.
Savills annual Financing Property survey, out today, records over 400 active property lenders, up from 240 in 2018.
Its head of valuation for UK and cross border, Nick Harris, said: ‘The growth of non-bank lenders continues to evolve, with debt strategies as a form of real estate investment now more understood.’
Girona Partners launches at a time when the cost of borrowing is going up and many in the market believe risk appetite is shrinking. This could play into alternative lenders’ strengths if banks become more risk averse.
