Lloyds Banking Group has recruited John Feeney from Henderson Global Investors to succeed Lynda Shillaw as managing director and head of corporate real estate in its Lloyds Bank Commercial Banking subsidiary, CoStar News can reveal.
Feeney, who joined Henderson in February last year as head of real estate debt to set-up the fund manager’s expansion into senior and mezzanine debt, takes up the role on 1 May, with a mandate to deepen Lloyds’ core real estate client relationships and product offering.
This is expected to include balance sheet management tools including issuing commercial mortgage backed securitisations (CMBS), bond issuances for clients as well as the primary use of the bank’s balance sheet.
Shillaw resigned last October, and left in January, to become a director of real estate at Scottish Widows Investment Partnership, a Lloyds Banking Group fund management subsidiary.
Feeney, who prior to Henderson worked for Bank of America Merrill Lynch for seven-and-a-half years including stints working out distressed real estate loans in Singapore, Tokyo and London, will report to Clare Francis, managing director, global corporates at Lloyds Bank Commercial Banking.
Lloyds said in a statement that Feeney’s capital markets background will be important as the bank looks to place “a greater emphasis on capital light solutions”.
Francis said: “The real estate sector is incredibly important to Lloyds Banking Group. John’s considerable real estate expertise will be invaluable to us, but more importantly to our clients and I am delighted to welcome him to my leadership team.
“As banks are required to focus more on a capital light lending model, John’s debt capital markets background will be vital for our clients. His knowledge and expertise across the full ‘originate to distribute’ spectrum will help our clients understand what will attract investors and ensure we assist our clients to execute their funding strategies effectively.”
Last Friday, Lloyds reported a £12.36bn reduction in the bank’s combined global commercial and residential loan book to £52.39bn, including £15.7bn in the bank’s CRE Business Support Unit, managed by Richard Dakin, £9.2bn in social housing lending and £2.1bn in loans to housebuilders.
CoStar News understands that Lloyds is gearing up for its most prolific year for new property lending since the merger between Lloyds TSB and Halifax Bank of Scotland four years ago, with plans to lend as much as £6bn across its three segmented business lines: global corporate real estate, mid-markets corporate real estate and SME corporate real estate.
During his time at Henderson, Feeney developed and capital raised for both a senior and mezzanine real estate debt fund, for which a cornerstone investor is expected to be confirmed in June.
Henderson has begun the process of replacing Feeney, who will remain at the fund manager until the end of April, with his eventual successor reporting into both Jim Irvine, head of fixed income, and Mike Sales, chief investment officer, global property at Henderson Global Investors.
In a statement, Henderson said: “We remain firmly committed to the real estate debt sector: we have been engaging with a strategic partner regarding the development of our debt platform and continue to do so. This would add both scale and expertise to our offering. We are optimistic that we will reach a conclusion to these discussions by summer this year.
“John leaves the business on good terms and we hope to continue working closely together once John takes up his new position, both in the provision of new debt and in collaboration with our real estate debt business.”
Henderson has £2.5bn in secured credit investments, including £0.9bn in real estate secured investments as well as £12.5bn in property assets under management.Lloyds Banking Group has de-leveraged £45.01bn from its balance sheet in global commercial real estate loans in the four years, against which an estimated £13.13bn in loan impairment charges has been taken.
Lloyds’ non-core real estate book, of which the majority but not all is in the bank’s BSU division, is down to around £13bn, according to last Friday’s results, bringing ever closer the time when the bank ceases to report on its legacy non-core real assets and eyes a full return to the private sector.