Billionaire family targets 15% return from real estate debt fund
The Pears family, owners of real estate valued at more than €7.5bn ($11.8bn), is to invest in a real-estate debt fund created by Cambridge Place Investment Management.
About €50m has been committed to the fund, which will be co-managed by the Pears family’s Talisman Global Asset Management.
Expectations of falling values in the real estate sector suggest shrewd investors will be looking hard before they leap. But the Pears family takes the view that it is already possible to pick up decent returns from bombed-out real estate debt that has sufficient security.
It will be targeting net returns of between 12% and 15% after fees of 1.5%. The co-managers can also expect a performance return and will target European commercial and mortgage-backed securities. A separate $15m (€9.6m) fund investing in US real estate loans has been launched.
The Pears family, active in property since 1952, prospered during the property boom. One of its businesses, Telereal, owns £3bn (€3.8bn) of assets, principally comprising properties tenanted by UK telecoms group BT.
Telereal has displayed interest in the Trillium property outsourcing group being sold by UK-listed Land Securities, but not at anything close to its £1.4bn valuation. Telereal’s initial bid was reported to be worth £850m and did not cover Trillium’s hotel portfolio, valued at £400m.
Cambridge is led by Martin Finegold, a former Goldman Sachs trader, whose secondary mortgage provider Kensington was knocked down to Investec last year for £283m, half its market value at the peak of the UK housing boom. Finegold’s Caliber Global Investment fund has fallen in value by 98% from peak levels after coming unstuck in the debt crisis.
Cambridge still manages €5.2bn across various platforms.
Finegold said: “These are difficult markets in which there remains a lot of risk. However, with risk comes opportunity.”
del.icio.us
Digg
Newsvine
reddit
StumbleUpon
