TIAA-CREF, the US multi-asset class asset manager, has hired former Lehman Brothers executive director Catherine Webster to spearhead its entry into UK and Northern European senior debt lending.
Webster, who joined at the turn of the month as head of European real estate lending, reports into Paul Wilson, managing director European real estate investment at TIAA-CREF, which has $520bn in assets under management (AUM).
While a spokesperson for TIAA-CREF confirmed Webster’s appointment, the financial services firm is thought to be first keen to establish a platform, with an origination team, and focusing initially on core prime and god secondary UK senior loans, before venturing into Northern European markets over the more medium term.
Webster’s hire has been anticipated for several weeks in London, joining TIAA-CREF’s office in capital established five years ago to build a European real estate footprint.
Back in February, at a ULI Conference in Paris, Thomas Garbutt, head of global real estate at TIAA-CREF, said to delegates: “We do see advantages in the debt space in Europe – particularly UK and Northern Europe – given the market dislocation which we don’t see will be rectified in the next 12 to 36 months.”
Garbutt added at the conference: “We are in the throes of starting a UK lending programme. As an investor, we will do increasing amounts of lending in Europe. We have many pockets of capital.”
Globally, TIAA-CREF has around $50bn combined in equity and debt – split approximately $29bn to $21bn, in US commercial mortgages to global direct real estate, respectively.
This is based on TIAA-CREF’s end of March AUM of $520bn, and Garbutt’s estimation at the ULI Conference in Paris that its global direct real estate footprint was between 3% and 4% of aggregate AUM, reflecting circa $20.8bn.
Garbutt added to delegates: “and we want to move to up to 5% – there is a pretty strong runway ahead of us to achieve that”.
A one percentage point increase on TIAA-CREF’s AUM, from 4% to 5%, would reflect an increase in capital allocation to global direct real estate of $5.2bn.
“We were the 12th largest acquirer of CRE worldwide last year and that will climb,” added Garbutt in February.
“We don’t necessarily see commercial real estate debt as better than equity, but as attractive in the UK and Northern Europe. We want to add exposure to European CRE debt but not reduce our equity investment. They are complimentary.”
In the US, TIAA-CREF is thought the largest manager of mortgage assets based on assets under management, with a lending appetite spanning investment and development senior loans, syndication participations, forward funding facilities, subordinated debt, both on a secured and unsecured basis.
“Our rigorous investment process combines our proprietary real estate research and credit analysis to meet our clients’ objectives. Our loan origination and due diligence processes assists the portfolio management team in determining those investments that offer the best relative value,” TIAA-CREF states on its website.