Evans Randall, the London privately investment bank and private equity firm, is establishing a €625 million ($984 million) mezzanine and preferred equity group to target leveraged property transactions and B note holders in the UK, Europe, the Gulf States and Asia.
The firm has poached five people from San Mateo, California-headquartered property finance firm Capmark to form the new business called Evans Randall Capital Partners.
Andrew Haines, Capmark’s former head of UK and Europe lending in Capmark's London office is leading the new group along with Sam Mellor. Duncan Elley, associate director. Leon Sodeyfi, associate and Sarah-Kay Ritchie, executive assistant complete the group.
Michael Evans, chairman and chief executive of Evans Randall, said that while there were particular opportunities in the current market due to the credit crunch, he believed that the mezzanine and preferred equity market would continue to grow as banks hold back from offering the level of gearing of recent years.
The group will focus on the UK, Europe, the Gulf and the Far East markets through separate funds and will enable commercial property investors and developers to reduce or release equity to invest in other projects, said the company. It will also focus on the restructuring of B note holders’ investments and will be targeting returns after fees of between 15 percent a year and 16 percent for itself and the funds’ co-investors.
Evans Randall, which owns a £5.5 billion ($11 billion) portfolio, is the latest to announce plans to run a debt vehicle. “Capital adequacy constraints will continue to make it difficult for banks to participate in this market as much as they have done in the past,” said Evans.