London-based ICG-Longbow Real Estate Capital has reached £212 million (€255 million; $341 million) in commitments for its UK property debt fund in the latest example of an alternative financier of property looking to fill the void left by traditional banks.
Marketing for the UK property credit vehicle began in October as the debt specialist gunned for a £500 million target, PERE revealed at the time. Now, according to a statement released today, the firm has revealed that ICG-Longbow UK Real Estate Debt Investments III has held a first close on £212 million.
ICG-Longbow’s latest real estate debt offering, if it reaches the target, would be double the size of the firm’s predecessor fund, Longbow UK Real Estate Debt Investments II. That vehicle accumulated £242 million of capital commitments and closed in September 2011. It also means that Longbow is on the fundraising trail less than one year after raising its current vehicle.
Target returns for Longbow UK Real Estate Debt Investment II are stated as being 14 percent per year, and the new vehicle is thought to be targeting a similar IRR. London-based Threadmark is the placement agent.
No more detail was forthcoming in the statement, as the debt specialist also revealed it had closed on €2.5 billion for its mainstream private equity debt product, ICG Europe Fund V – the largest fund of its type to be raised since 2007. ICG Europe Fund V has a five-year investment period and recently took part in the management buyout of ATPI, the UK-based travel management company, as well as buying senior debt in an existing portfolio company, Lcopal.
ICG-Longbow was started in 2006 as an investment manager solely focused on the UK in order to provide senior, mezzanine and whole loans to Britain’s commercial real estate sector. The firm also manages a single investor mandate of £100 million designed to return more than 20 percent via mezzanine and preferred equity investments. It is 51 percent owned by Intermediate Capital Group, the London-listed credit company.
ICG-Longbow is led by joint managing partners Kevin Cooper and Martin Wheeler. Both men were founding members of GMAC’s UK Commercial Mortgage business, which was established in 2002 and subsequently was sold off in 2010.