ICG-Longbow has fully realised its £242m real estate debt investments fund II with a gross IRR of 17.1% per annum
Fund II achieved its final close in September 2011 and made 18 investments with an average deal size of £16m across the retail, industrial, office and student housing markets.
It had an average cash coupon of 9.5% during its life.
The fund’s largest underlying property transaction was the 2012 refinancing of 120 Holborn, where it provided £33m in a £45m mezzanine loan alongside £90m of senior debt.
The property was sold to Singaporean investor UOL in November 2016 for £222m, and the fund generated a 20% IRR when it realised its investment.
Martin Wheeler, co-head of ICG-Longbow, said: “In response to the uncertain political environment, many investors are avoiding properties that are perceived to be high risk, favouring core properties with secure income streams.
“However, against the backdrop of economic growth and continuing occupational demand, we believe this may lead to interesting buying opportunities for value-add or less stabilised properties for our partners, which we expect will generate attractive risk adjusted returns.”
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