Venn Partners to launch Dutch resi mortgage platform

Venn Partners, an asset manager and operator of real estate debt and consumer loan platforms, plans to establish a new residential mortgage origination business in the Netherlands with the aim of boosting its Dutch mortgage lending to €1 bn by the end of 2015.

Marc de Moor, a consumer credit specialist and former executive director at Belgian bank Argenta, has been recruited to lead the new business which is targeting €500 mln of mortgage origination per annum and at least one RMBS issuance per year.

De Moor has over 30 years of experience in social housing funding, retail banking and insurance. At Argenta Nederland he established a Dutch retail operation and built it up to include a €15 bn mortgage portfolio and a €2.5 bn savings and complementary life insurance business.

Venn Partners has established several direct lending platforms in real estate over the past five years and in late 2013 led a consortium in the acquisition of a €500 mln portfolio of prime Dutch residential mortgages from GE Artesia, which it successfully refinanced through its Cartesian RMBS platform.

The decision to establish a new Dutch residential mortgage origination and servicing platform is part of the company's strategy to expand its direct lending activities in Europe, the company said in a statement.

'Our target will be the Dutch mortgage market where current dynamics are interesting and challenging,' De Moor said. 'Following seven hard years and a 20% price drop the housing market is picking up again with increasing volumes of new lending, healthier margins and consumers who are more positive and receptive to new market entrants.'

Attractive bond surrogate
Residential has traditionally been the lowest-yielding asset class in real estate but now with bond yields converging, residential is an attractive bond surrogate with the sector moving onto the radar of institutional investors.

'Four or five percent yields look attractive compared to bonds, plus cashflow stability is a significant bonus,' Marcus Cieleback, head of research at Patrizia Immobilien, recently commented at PropertyEU’s pan-European residential Investment Briefing last week.

Patrizia's €14 bn portfolio is equally split between residential and commercial real estate, mainly in Germany, but 'we are now open to resi opportunities across Europe,' Cieleback said.

Investors are looking at all different types of residential investments, from core to value-add and opportunistic, and are now also willing to invest in more niche segments like student housing. 'Residential investments are more management-intensive and need a presence on the ground. Germany is a case in point: its regional differences are very difficult to monitor from the outside.'