Irish investment fund teams up for second lending JV

Ireland Strategic Investment Fund has teamed up with US real estate lender Quadrant to form a real estate development lending joint-venture. The new fund is the state-controlled investment fund's second real estate lending joint-venture after it announced a tie-up with KKR earlier this year.

US debt fund manager Quadrant Real Estate Advisors has teamed up with Ireland’s new state-owned investment company to make development loans in Ireland, PDI sister title Real Estate Capital reported. 

The Irish state-backed Ireland Strategic Investment Fund (ISIF), which is controlled and managed by NTMA (the National Treasury Management Agency), will invest up to €50 million, matching €50 million from Quadrant.

The €100 million will be used to finance office development and construction projects, addressing what Quadrant CEO Kurt Wright called “an important gap in the market.”

“Finance for office development projects is in short supply in Ireland with the main banks restricting their finance to the lowest risk projects which have letting or sale agreements in place from the outset. We will work with developers in the early stages of projects where the risks are higher but where the rewards are greater,” Wright said.

ISIF director Eugene O’Callaghan added that the deal is a “good example of ISIF’s flexibility and capacity to act as an “accelerator” when commercially attractive investment opportunities arise.”

ISIF was established in December 2014 to invest to support economic activity and employment with up to €6.8 billion of funding. In the summer, it linked up with private equity firm KKR to back residential developers to the tune of €500 million.

Quadrant has nearly $6 billion under management and has been building up a business in the UK & Ireland over the last year, making about €100 million of loans.

In September, the firm took a £35 million ($53 million; €49.5 million) mezzanine participation at a 750bps margin in a £147 million whole loan underwritten by Lloyds to finance BMO’s (formerly F&C REIT) £175 million acquisition of Parkgate retail park in Rotherham.

It has also financed projects in Liverpool and Manchester and backed a D2 Private/Cheyne Capital Management joint venture when it bought Dublin’s Cleary’s department store.

The NTMA also houses NAMA and the National Pensions Reserve Fund.