Azora and Oquendo Capital End Direct Lending Partnership

15 July 2019 – Richard D. K. Turner

A short-lived alliance between Azora and Oquendo Capital, designed to facilitate access to alternative financing for companies in the real estate sector, has ended before it really even had begun. The two firms initially planned to raise €300 million to finance debt and other operations linked to the real estate sector. However, after just eight months and €40 million, Azora and Oquendo are now negotiating how the end their partnership.  

Since November, Azora and Oquendo Capital had been attempting to raise €300 million to directly finance small to medium-scale real estate projects in Spain and Portugal. The two firms had planned to focus on land, logistics and the hospitality sectors.

Sources are pointing to possible disagreements regarding the distribution of commissions.  Both companies declined to comment.

Original Story: El Confidencial – E. Sanz / C. Hernanz

Íbero Capital Lends €80M To Property Developers to Finance 600 New Homes on the Coast

28 March 2019 – El Confidencial

Property developers are finally able to access alternative financing. Over the last 12 months, Íbero Capital Management has granted loans amounting to €80 million to various property developers to finance the construction of more than 600 homes across Spain.

In its latest operation, Íbero CM has signed an agreement with Grupo Sankar to finance six residential projects in the province of Málaga for €40 million. The projects will involve the construction of more than 400 homes, and follow three other projects to which financing was granted (to another property developer) last year in Mijas.

Looking ahead, Íbero CM expects to sign several new loan operations during 2019 to close the year with total financing granted of almost €250 million. The manager is negotiating with national and regional property developers alike in regions such as the Community of Valencia, Andalucía and Madrid.

Alternative financing for residential development projects is finally taking off after years on the fringes. Other companies operating in the sector include MCAP Global Finance, Azora and Oquendo Capital, amongst others.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

Azora & Oquendo Capital Join Forces to Finance the Real Estate Sector with €300M

November 2018 – El Confidencial

The fund manager Azora, created by Fernando Gumucio and Concha Osácar, and Oquendo Capital, the Spanish private debt fund manager led by Daniel Herrero and Alfonso Erhardt, are joining forces to facilitate access to alternative financing for companies in the real estate sector. The alliance is creating a “direct lending” real estate platform, which is going to launch its first fund with €300 million destined to financing debt and all types of operations related to real estate, as well as to direct management mandates for individual operations based on their characteristics.

That is according to confirmation provided by sources close to the agreement speaking to El Confidencial. They indicate that any project worth more than €4-5 million will be considered, in both Spain and Portugal, ranging from the purchase of land and logistics warehouses, to the repositioning of hotel assets and subordinated debt, an area in which Oquendo Capital has a lot of experience, given that it already has three funds dedicated specifically to financing corporate debt.

The main objective of the platform promoted by Azora and Oquendo Capital is to cover a market segment that is looking for alternatives to debt to complement traditional bank financing, given that in the midst of the real estate recovery, access to financing to launch real estate project is continuing to represent a real handicap for many companies in the sector.

According to the sources consulted, the investment strategy that the platform proposes will focus on offering flexible financing solutions for small and medium-sized real estate operations, with a moderate risk profile, accessing those transactions in a unique way based on the combination of the successful trajectories of Azora and Oquendo in the real estate and alternative financing markets.

Alternative financing is taking off

With this fund, three vehicles have now been created in the last three months to facilitate access to financing in the Spanish real estate sector. The first to leap to the fore was Ibero Capital, a platform launched by two former directors of Sareb, Walter de Luna and Luis Moreno, with €400 million on the table. A few days ago, that firm closed a €35 million financing arrangement with a property developer in Málaga. The money will serve to pay for three plots in Mijas for the construction of 147 homes, as well as to repay part of its bank debt and finance some of the construction. The remuneration of this operation involves a fixed cost component plus a variable element, depending on the final result of the project.

Behind that fund is Oak Hill Advisors, one of the largest investment funds in the world, with more than USD 30 billion in assets under management, and which has invested more than €1 billion in Spain since 2005, primarily in real estate projects. According to the founders of Ibero Capital, that operation in Málaga will be followed by three or four more operations over the next few months.

Also, three months ago, Colliers International received the exclusive mandate from MCAP Global Finance, the London subsidiary of the manager New York Marathon Asset Management, to manage €200 million dedicated to the financing of buildable land purchases. The firm led by Mikel Echavarren is finalising its first financing deal amounting to €3 million. In its case, unlike with Ibero Capital, the financing will be restricted to land purchases only.

The financing of real estate projects by non-banking entities is an established market in countries such as the US, the UK and France, but not in Spain, where it is still in the development phase. Investment in these types of projects is characterised by its attractive profitability/risk profile with a focus on capital preservation and regular distributions in the form of interest (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake