A raft of US insurance companies, including New York Life and MassMutual, are eyeing real estate lending opportunities in the UK.
The firms, which are active in the private placement market, are looking to move into UK mortgage lending to fill a gap in the market left by traditional banks retrenching from the sector.
Industry sources say up to 10 US companies are undertaking exploratory work in relation to potential business in the UK, including MassMutual subsidiary Babson, but added that it could be “some time” before any establish operations here.
The move would follow the arrival of a number of other US giants, such as MetLife, and European insurers such as Axa, which are actively lending in the UK.
Entry could come through mandating local debt origination, execution and loan management businesses, like MetLife’s partnership with Laxfield Capital, which originates and manages property-secured senior loans of between £20m and £250m on its behalf.
Another route into the market would be to start taking debt from originating banks as part of a syndication deal, as an alternative to the “long-term and expensive route” of setting up a new office.
One source said: “Businesses which don’t necessarily have lending operations in the UK may see the business opportunity, but it can be a long way until they can effect the move.”
He said it was often easier for a company which already carries out lending, such as New York Life, to set up in a new market, rather than a domestic firm trying to move into the lending space, as they can simply transfer and expand existing operations.
A New York Life spokesman said: “New York Life remains strongly committed to the private placement market, where we rank in the top three lenders (alongside Pricoa and Met).”
? MetLife and Deka Bank jointly provided a £186.6m five-year facility to SEGRO and Moorfield for their purchase of the £314.7m, 14-strong UK Logistics Fund. Laxfield acted on behalf of MetLife.
