M7-backed Tunstall Real Estate Asset Management has made its first investment for a new Dutch-focused discounted pay-off debt fund, DPO Fund 1.
DPO Fund 1 has been established to facilitate the restructuring of non-performing loans, held against otherwise performing assets, by a mechanism of acquiring loans (from €2m (£1.8m)) and simultaneously restructuring them by mutual consent alongside the original borrower.
The investment comprises the acquisition of a portfolio of five loans for €31.7m, secured on a portfolio of 20 assets across the northern region of the Netherlands, predominantly office properties but also comprising warehouse and retail assets.
The fund is Tunstall’s first credit investment fund. The transaction, which follows the group’s recent acquisition of London housing-led regeneration specialist Pinnacle, underlines Tunstall’s intention to develop a pan-European real estate platform investing, via equity and debt, into corporate, direct and indirect opportunities.
Chief executive Roger Clarke said that with an estimated €11bn of NPLs to be worked through in the Netherlands, Tunstall believes there is significant demand for an investor that is willing to refinance loans through a discounted purchase mechanism, from both the holders of existing loans of this size, many of which have been acquired as part of larger debt portfolios, as well as the original borrowers.
He said the company was well placed to play an active role in this speciality lending market in the Netherlands due to its close association with M7 Real Estate, a pan-European investor and asset manager with operations in 13 European countries.
“The loans we have acquired are backed by a strong portfolio of properties owned by a very capable sponsor who will now be free to undertake a number of value accretive asset management initiatives.
“Following on from our recent investment in Pinnacle in London, the launch of our DPO Fund 1 is indicative of the ambition we have for Tunstall and the innovative types of investments we are seeking to undertake.”
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