Lone Star, Apollo and Blackstone get $15 billion to buy Spanish real estate assets

The largest international investment funds in Spain get new ammunition to increase assets’ acquisition. Spain is their favorite country, although Portugal and Italy are appearing more and more on the radar, expecting them to deal with their own crisis.
Investment funds have money burning their pockets to invest in Spain. The three largest international investors have recently gathered $15 billion dollars (€14 billion) with their aim on Spain. They’re Lone Star, Apollo and Blackstone, three of the most attractive funds in this market since the start of the crisis.

That money has been gathered by the specialized fund in the Real Estate sector There is no specific quota to be invested in Spain, but sources close to these institutions explain that this is one of the most attractive markets in Europe at this time, as it’s been since 2012.

Along with Spain, Executives from these funds are exploring more and more possible transactions in Portugal, Italy and Greece in the face of the financial crisis those countries face. Nevertheless, those sources explain that those countries are way less serious when selling loan portfolios, investee firms or properties, which is the reason they keep coming to Spain after a fiasco in a transaction. Ireland is another country they’re often focused on, but there are less and less opportunities there.

These firms’ MO is as any venture capital vehicle. They gather funds from retreat funds, insurances and great fortunes with the commitment to return it within the next 5-10 years. With this capital, they look for alternative investment to the stock exchanges and bunds, mainly in countries hit by a financial crisis. Once installed they purchase default credits, Real Estate properties, bank investees and all sort of corporate loans, with the goal of seizing the assets and sell them with capital gains. Their goal is to get yearly yields of 15-20% That is why Spain has been a preferred destination since 2012.

Old friends

The fund that has got the most ammo is Lone Star. Last week it closed the deal for a new $5.6 billion to invest in real estate, companies and consumer finance, beating their target to gather 5 billion dollars. With that sum, it’s possible that the firms starts bidding on Spanish banking portfolios after years on the retreat.

This fund, led in Spain by Mr. Juan Pepa from Argentina, led the largest operations in 2014, when it purchased the Eurohypo portfolio in Spain and Kutxabank’s RE developer (Neinor Homes). It spent €4 billion for these operations. With that, it turned into one of the largest developers at a national scale.

This fund currently competes with Apollo in the bid to take over the Portuguese bank Novo Banco. Against Lone Star’s 5.6 billion, Apollo is trying to raise over 4 billion for a European fund. That firm is led in Spain the Andrés Rubio, and is known for the purchase of 85% of Altamira, that now Banco Santander wants back, and 100% of Evo Banco.

In the meantime, Blackstone has $4.5 billion extra since the summer for its fund BREDS III, specialized in the acquisition of real estate debt. This fund closed its largest purchase in Spain last year when it got the distressed mortgages from Catalunya Banc for 3.6 billions. In addition to banking assets, it’s a known investor for the purchase of debt from distressed companies, the logistic industry and the social housing properties segment.

Source: VozPopuli. Translation by Miguel Vinuesa Magnet.

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