A company controlled by Intermediate Capital Group Plc, a lender and money manager, plans to raise as much as 250 million pounds ($400 million) by selling shares in a new lending unit through an initial public offering.
The London IPO of ICG-Longbow Senior Secured UK Property Debt Investments Ltd. will raise capital to provide senior loans backed by commercial real estate in the U.K., according to an e-mailed statement today. The company will be managed by a venture formed last year by ICG and Longbow Real Estate Capital LLP, founded by Martin Wheeler and Kevin Cooper.
ICG-Longbow joins insurers and funds seeking to fill the real estate funding gap caused by tougher credit conditions banks demand as they scale back property lending to meet stricter capital rules. The credit shortfall may be as large as 100 billion pounds in the U.K., based on current loan terms, according to De Montfort University estimates.
“This new vehicle will aim to provide investors with predictable and attractive target returns with minimal risk of income or capital loss,” ICG-Longbow Chairman David Hunter said in the statement.
The company aims to pay dividends that will provide shareholders with a 6 percent return once fully invested, according to the statement.
London-based ICP makes mezzanine loans and manages funds holding about 11.4 billion euros ($14.5 billion) of loans.
Investec Bank Plc is working as adviser and bookrunner for the IPO.