Cordea Savills is the latest fund manager to announce a push into debt with the appointment of Keith Davidson and James Tarry.
The pair, who were directors at Palatium Investment Management, are joining the UK-based investment manager of the Savills group as co-heads of debt investment.
They will raise funds to provide new finance, which could include originating senior and subordinated debt, or buying performing or non-performing loans at “attractive risk-adjusted rates of return”.
Davidson said the funds could include either co-mingled funds or segregated mandates from investors wanting exposure to real estate debt.
The vehicles could target the provision of senior debt from prime through to “secondary” assets, depending on investors’ return requirements.
Cordea Savills chief executive Justin O’Connor said that Davidson and Tarry will also work closely with the team responsible for the Prime London Residential Development Fund.
The plan is for them to invest capital raised for the fund, which was launched in October last year. Davidson and Tarry will advise on the provision of mezzanine debt to residential developers.
Cordea Savills, which has more than €3.8bn of assets under management, hopes to reach a first close next month for the fund, which has a target size of £250m.
Cordea Savills is the latest in a line of fund managers looking for opportunities in the financing landscape for European commercial real estate as traditional lenders retreat from the sector.
However, it is the first fund management division of a property services firm to make the move, which Davidson hopes will make it an attractive proposition to investors.
In recent weeks, Henderson announced the appointment of Bank of America’s Asian real estate lending boss, John Feeney, to spearhead its entry into the debt market. Private equity firm Fortress and fund manager AEW are also both working on plans to launch funds to provide senior debt.
Davidson and Tarry have a long track record in the real estate debt sector, with extensive experience in origination, underwriting and syndicating European real estate debt products.
The pair joined Paul Rivlin and Neil Lawson-May’s Palatium from Citi’s property debt group in 2008, and have been managing legacy commercial mortgage-backed securities positions as well as a fund that invests in bonds on the secondary market.
bridget.o’connell@estatesgazette.com
