Centuria Capital is expanding into real estate debt market by securing a 50% investment in real estate debt fund provider Bass Capital for $24 million.
It would also have the option to acquire the remaining 50% over the next five years.
The deal would be expected to help Centuria expand its unlisted funds platform and provide the opportunity to offer non-banking finance for real estate secured transactions including development projects, bridge finance and residual stock.
Bass Capital, which was established in 2016 by former UBS European head of leveraged finance and debt capital markets, Giles Borten, and former managing director of Wingate and Gresham Partners, Nicholas Goh would bring around $270 million committed loan book, over $300 million in pipeline opportunities, $107million open-ended debt fund and 20 current debt funds backed by ultra and high-net-worth investors (HNWs).
“This investment brings a new business line to Centuria, which helps expand our unlisted platform, diversify our recurring revenues and provide further investment opportunities to our investor clients,” Jason Huljich, Centuria joint chief executive officer, said.
“For the past three years we have partnered with Bass Capital across a number of lending opportunities and have confidence in the team’s abilities and its business model. Our investment in this platform is an opportunity to capitalise on strong demand from our high-net-worth investors for debt products, as they seek a diversified investment risk profile.”
The firm said that strong investment appetite recently saw Bass Capital significantly oversubscribed with $107 million raised for the first close of its open-ended fund – the Bass Property Credit Fund – and $50 million in estimated demand for the second close.
It was expected financing demand from the non-banking financial sector would continue to grow, with the big-four banks in Australia dominating all lending with over 75% market share against the estimates of less than 40% for all banks in the US.