Henderson set to launch real estate debt products

London-based Henderson Global Investors is preparing to launch two Real Estate Debt Funds for the institutional market.

Both funds aim to capitalise on the broad retraction of European bank lending and will have a common focus on premium real estate with strong sponsorship.

The Henderson High Income Real Estate Debt Fund will invest in both senior and defensive subordinated real estate secured debt. Investments will predominantly be newly originated and secured by high quality leased real estate in well established markets at leverage of up to 75% LTV. With a seven year investment horizon, the Fund will target a gross internal rate of return of between 8% and 10%, largely to be provided by coupon income.

A second fund, the Henderson Senior Secured Real Estate Debt Fund, will invest in senior ranking and conservatively structured real estate loans at leverage of up to 60% loan to value. The loans will again be newly originated and secured by premium property in the most well established locations. Over seven years the fund will target a total gross return of between 5% and 6% per annum.

John Feeney, head of Real Estate Debt, will lead the execution of investment origination and underwriting drawing on the broad resources of the Secured Credit and Global Property teams.

Colin Fleury, head of Secured Credit, will provide fund oversight and direction of team resources. Marcus Langlands Pearse, director of Property, will co-ordinate and oversee the real estate debt due diligence process within Henderson’s global property business.

Feeney said investor interest in real estate debt is increasing with higher risk-adjusted returns available. “With a focus on high quality property and well-capitalised, expert sponsorship, our aim is to deliver the premium fund products in this fast-evolving market”.

Henderson has around £12.5bn of property funds under management across Europe, Asia and the US. The property team comprises over 200 staff based in Beijing, Chicago, Frankfurt, Hartford, Hong Kong, London, Luxembourg, Madrid, Milan, Paris, Singapore & Vienna. It also has additional asset management capabilities through a joint venture in Hamburg.

The property business manages pooled and segregated accounts which invest in properties offering core and value-added returns. Investments cover all commercial sectors as well as specialist and/or regional themes.

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