Schroders, the €578 billion asset manager, has announced plans to expand its presence in the European real estate lending market, with the launch of a new debt platform, reports PDI‘s sister title, Real Estate Capital.
The manager has hired property credit industry veteran Natalie Howard, who most recently worked for UK debt fund manager DRC Capital, to lead the new business line from London. The company announced that Howard will be responsible for building a full-service real estate debt platform “offering clients the complete range of risk and return investing throughout the real estate debt spectrum”.
Schroders already has experience in European property debt. In May 2018, it announced that its Schroder Real Estate division had launched the £200 million (€226 million) Income Plus Real Estate Debt Fund in association with London-based boutique credit manager Venn Partners, now ARA Venn. The fund was focused on lending in under-banked parts of the UK property market.
Its latest announcement hinted that the company now plans to offer investors the opportunity to invest in a wide range of real estate lending strategies with varying risk and return profiles. Schroders said its strategies would include all types of senior debt, as well as high-yield lending including mezzanine finance. It added that the new platform would offer loan origination, underwriting and asset management in the UK and continental Europe.
“This is a strategically important hire for us as we look to leverage our strong real estate expertise to provide a comprehensive service to our client base,” explained Sophie van Oosterom, who joined Schroders as global head of real estate in July 2020, having previously led CBRE Global Investors in the EMEA region.
Equity-focused real estate managers are increasingly expanding their debt capabilities, as investor interest in defensive credit strategies grows due to the uncertainty created by the covid-19 pandemic. On 14 January, Luxembourg-based manager Corestate Capital announced that it had expanded its lending business through the purchase of Frankfurt-based Aggregate Financial Services, a debt financing platform and securities trading bank.
In Schroders’ case, van Oosterom said real estate debt strategies will complement the company’s current offering. She added: “Our local presence in the main European markets strongly positions us to source, underwrite and deliver performance for our clients.”
Howard commented that her new role will require the development of “comprehensive capability” in property debt to meet investors’ evolving needs. “Real estate debt has become an established asset class, having grown in popularity with insurance companies, pension funds and asset managers looking to diversify their real estate and fixed income portfolios,” she added.
Prior to joining DRC in 2018, Howard led UK asset manager AgFe’s commercial real estate senior debt business. She began her career in 1989 at Paribas and worked at Morgan Stanley, where she was a founding member of the investment bank’s European CMBS business.