Thursday, September 24, 2020
International

Blue Noble enters the crowded European property funds sector

Swiss asset and wealth manager backed London-based real estate management company has joined the European property funds sector

Another new entrant into the European property funds sector has intensified competition among funds seeking money for investing into the property sector. Launch of the $550m real estate boutique in London comes at a time when a record number of funds also seek money. Blue Noble, the London-based real estate management company is backed by Woodman Group, a Swiss asset and wealth manager.

Blue Noble’s chief executive Paul Forshaw Forshaw and the founding team at Blue Noble formerly worked in the real estate team in HSBC’s alternative investments division where they managed assets in Europe and the US.

The real estate boutique has been given control of a $450m portfolio from the $4bn Zug-headquartered group which is invested mainly in commercial property in Scandinavia. But Forshaw said that it is also raising capital for a new fund beginning with $100m from Woodman. It hopes to at least double the initial fund by tapping other investors before using leverage to take it to the $500m mark. This will be for investments in the UK and western Europe. Forshaw said that the company plans to keep the first capital relatively close to home, adding that he is interested in Germany and Italy in particular.

Investors have flooded the property sector during the decade following the financial crisis hoping better returns. The UK head of real estate at KPMG, Andy Pyle said, in the ultra-low interest rate environment for a decade, people are looking for an enhanced return. He added that one should also have a tangible asset that’s certainly attractive to some of the overseas investors. According to data provider Preqin, real estate assets under management more than doubled between 2007 and mid-2017 to $823bn. During the decade since the financial crisis, a gap has been created in the property investment sector as banks have pulled out due to the pressure of trimming their balance sheets. This gap in the sector has been filled by new investment managers in the sector.

The director of research and market information at Inrev, Henri Vuong said that investor demand for real estate is still growing. Inrev is the European association that represents investors in non-listed real estate. She added that that there is also continued demand for the skills and knowledge needed to make and manage decent property investments.

However, the head of real estate products at Preqin, Oliver Senchal, warned that the competition for raising capital is increasing. There has been pressure on new entrants as a record high of about 550 real estate vehicles globally are currently fundraising. He added that real estate fundraising has been pretty strong for the last few years but it’s now intensely competitive.

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