London-based hedge fund CQS Capital has hired a specialist manager to support its push into the real estate debt market.
The $12bn (£7.8bn) fund has appointed Adel Oucherif from Mount Kellet to run a real estate special situations portfolio. Oucherif’s role will initially involve seeking out investments in individual non-performing loans. A move into NPL portfolios may follow, dependent on performance.
Oucherif will work as part of the distressed team, set up by CQS last October and headed by former Apollo Global Management director Simon Finn.
The unit focuses on western Europe, where CQS sees a wave of opportunities stemming from the region’s banks, which are having to shed non-performing and non-core assets to come into compliance with new regulations.
The NPL market, which is estimated to have a value of as much as $2.5tn, has become increasingly attractive to hedge funds.
Richard Thompson, chairman of PwC’s portfolio advisory group, said NPLs were attracting attention from a wide range of investors, particularly hedge funds, as they offer greater certainty of underlying asset value and there is significant supply.
He added that the market was also relatively untapped.
European portfolio sales last year, including performing assets, reached $91bn according, he said.
Some $49bn of those were NPLs, according to estimates from CBRE Capital Advisers.
CQS, founded by Sir Michael Hintze in 1999, manages more than $12bn for clients.
In 2010 it appointed former head of European property at Credit Suisse, George Kountouris, to build its real estate activity, with a focus on indirect investment.
He left the firm in December 2012 but still acts as an adviser to the business on selective transactions.
