Former investment banker Andrew Penny and West End investment agent Nick Deane have founded QZ Capital which will seek to invest in central London commercial and residential properties with a value-add play alongside joint venture partners.
Penny, a real estate banking veteran of 25 years who left JPMorgan last June after 13 years, and Deane, the founding partner of Hanrahan Deane, launched QZ Capital three weeks ago.
QZ Capital, an independent real estate investment, advisory and asset management firm, will co-invest equity alongside joint venture partners from the private equity, family office, institutional and asset management sectors.
Penny and Deane will target value-add investment opportunities throughout central London, at between £20m to £100m in size, which offer an internal rate of return of between 12% and 15%.
QZ Capital’s transactions will typically be leveraged up to senior debt levels, with all financing arranged, structured and managed by QZ.
Penny and Deane will source and structure investment opportunities at both direct and corporate levels, through equity, debt or hybrid structures targeting across the spectrum of mispriced, distressed and semi-distressed assets.
“We have very close relationships with a handful of different types of parties – private equity funds, family offices and asset managers – and we are seeking value-add propositions where we are comfortable that the underwriting returns are at 12 to 15% off today’s values and with no stretched growth assumptions,” Penny told CoStar News.
Deals are expected to be sourced from across the spectrum: from de-leveraging banks, closed–ended funds nearing maturity, LPA and fixed charged receivers, via CMBS loan servicers, as well as investors ranging in their need to sell.
Penny added: “We are both bullish on the prospects for London as a commercial centre. The weak sterling and low interest rates, which will presumably prevail even in the face of rising inflation, will combine to continue to attract capital into London. Our prospective joint venture partners see London as an attractive long-term investment.”
This new venture is Deane’s return to London real estate after taking a year out in 2012 to set up a charity called BikeAid after leaving Jones Lang LaSalle at the end of 2011.
Deane was a founding partner of Hanrahan Deane which was acquired by King Sturge in 2006 which, in turn, was acquired by JLL in May 2011.