Funds to Insurers Exploiting Bank Cut in Europe Loans: Mortgages

Henderson Global Investors Ltd., La Francaise Asset Management and a Massachusetts Mutual Life Insurance Co. unit are moving into European commercial property lending as the region’s banks reduce 2.4 trillion euros ($3.1 trillion) of real-estate loans they hold by as much as 25 percent.

Insurers, private-equity firms and other non-bank investors will cover between 100 billion euros and 200 billion euros of disappearing bank funding over the next three to five years, according to estimates from Morgan Stanley analysts. That may still leave a shortfall of as much as 500 billion euros, the analysts wrote in a report last month, as banks shrink their balance sheets to satisfy proposed capital regulations.