Ares Management is ramping up its real estate debt platform eight months after it cemented its presence in Europe by buying Area Property Partners.
The US investment manager’s London office has recruited former Citigroup and JP Morgan property finance specialist Steven Edwards to build up Ares Real Estate Group’s European lending business.
Edwards, who left alternative investment advisory firm Tyndaris to join Ares, has worked in CMBS and distressed debt during his tenures as senior director at Citi and managing director at JP Morgan.
He is understood to be working to set up a business to originate and manage debt.
The Los Angeles-headquartered firm has the ability to provide “lower-margin” finance in Europe from its US debt funds.
However, it is expected that the firm will raise capital for a European debt fund that would allow it to participate in a wider variety of deals.
According to market sources, Edwards was recruited by partner John Ruane and his role will involve building up a team over time as the platform grows.
The move could see Ares Real Estate’s European division replicate its US property business, which tends to work in the debt, rather than the equity, part of the sector providing senior, stretched senior and mezzanine loans. It focuses on originating, investing in and managing “middle-market” loans, and has $2.5bn in committed capital across 115 properties through its Ares Real Estate Debt team, alongside a loan servicing business.
In addition to managing private funds, it also invests in debt through a New York-listed REIT, Ares Commercial Real Estate Corporation, which has a $760m portfolio.
The move comes after Ares teamed up with Citi to bid for Deutsche Postbank’s €1.9bn predominantly UK commercial real estate loan book, in the Project Tower process last summer. It was pipped by GE Capital Real Estate.
Ares Real Estate Group has $8bn of committed capital under management.
Ares declined to comment.
bridget.o’connell@estatesgazette.com
