ICG-Longbow SSUP: Exploiting A Niche In UK Real Estate Debt
Edison | Nov 19, 2018 07:45AM ET
ICG Longbow Senior Secured UK Property Debt Investments Ltd (LON:LBOW) offers investors exposure to the UK real estate debt market, mainly through investments in senior secured whole loans. LBOW’s investment strategy is supported by the team’s deep expertise in both debt and UK real estate, enabling it to continue to pay a high stable dividend by investing in higher LTV loans, while controlling the risk through extensive analysis of the underlying properties’ cash flow generation potential, as well as the borrower’s business plan. The investment strategy should be assisted by the relatively favourable rental growth prospects in parts of the regional UK real estate market.
Investment strategy: UK senior real estate debt
LBOW targets and has consistently delivered an annual dividend of 6p per share (which we believe corresponds with a gross IRR of c 7.5% at portfolio level), as well as capital preservation and a modest level of capital gains in the long term. This is achieved through investing in a portfolio consisting mainly of fixed-rate senior secured whole loans across the broad UK real estate spectrum, taking advantage of the structural market opportunity that persists from the continued retrenchment in bank lending. The fund is particularly focused on regional markets, which seem to be behind London markets in the cycle, offering better rental and value growth prospects.
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