Two subsidiaries of Dutch bank ING, ING Investment Management and ING Real Estate Finance (ING RE), have entered into a partnership to manage bespoke portfolios of commercial real estate loans on behalf of institutional investors, the bank said in a statement on Thursday.
Their first client, insurer Nationale-Nederlanden Life (also an ING affiliate), has funded the initiative with more than €400 million. ING said that mandate could grow to €750 million.
ING IM manages €2 billion in assets and expects significant inflows into commercial real estate loans in Europe, viewing them as undervalued and offering attractive returns. ING RE is one of the leading commercial real estate lenders in Europe with around €25 billion in assets.
Jelle van der Giessen, chief investment officer at NN Group, the parent group of ING IM International, said: “We believe stepping into commercial real estate loans now is the right moment in the cycle. This investment fits our strategy to participate direct into the real economy through asset classes such as infrastructure and commercial real estate loans, which is of increasing interest to insurance companies.”
Peter Göbel, chief executive at ING Real Estate Finance Netherlands, said: “This new and unique proposition allows ING REF to leverage its origination and lending capabilities to bridge the gap in the market between capital providers looking for attractive spread products, and real estate companies seeking loans for acquisitions and refinancing. This partnership will bring additional liquidity to the commercial real estate loans market and could provide attractive returns for institutional investors who are providing the capital.”
Han Rijken, head of insurance investments at ING Investment Management, added: “These loans are attractive based on the spreads and capital treatment under Solvency II compared to many of other fixed income asset classes. In addition it offers additional diversification to the fixed income portfolio.”
ING IM International, a subsidiary of the NN Group, manages €168 billion on behalf of institutional and individual investors worldwide. ING IM is preparing for a standalone future with ING's Insurance operations in Europe and Japan. The part flotation of NN Group was also announced today.
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