Savills Investment Management (“Savills IM”), the international real estate investment manager, has acquired an initial 25% stake in DRC Capital (‘DRC’), the commercial real estate debt investment adviser. The deal includes an option to acquire the remaining 75% in 2021. The acquisition will allow Savills IM to broaden its investment proposition to include a range of debt lending strategies in order to better service clients.
Founded in 2012 by Dale Lattanzio, Rob Clayton and Cyrus Korat, DRC has been a leading player in the emergence of real estate debt investment vehicles in Europe. It has arranged over £2.6 billion of debt investments since inception and currently has assets under management of £2.0 billion across a range of senior debt, high yield and whole loan products.
DRC achieved one of the top 10 largest real estate fund launches in Europe in 2017 with its £600 million ERED III high yield fund. 5 of the top 10 launches were debt funds.*
Dale Lattanzio will join the Savills IM Global Executive Committee while members of the Savills IM senior leadership team will be appointed to the DRC Management Committee.
Nick Cooper, Chairman, Savills Investment Management, commented:
“DRC has been an innovator in the real estate debt space and has rapidly built an enviable position in a competitive environment. The DRC team is highly regarded in the industry with an impressive track record and the combination with Savills IM will enable us to provide our investors product access to the entire real estate capital structure.
“With the benefit of regular income and the borrower’s equity cushion, debt is often seen as an attractive alternative to direct equity investment. With Savills IM primarily adopting an income investment approach we believe that the investment fundamentals of debt investing make it attractive to offer both strategies throughout the whole cycle.”
Dale Lattanzio, CEO and Managing Partner, DRC Capital, commented:
“Savills IM and DRC is a compelling fit in terms of our visions to serve investors who are increasingly seeking a single point of access to the capital structure. We are delighted to join forces with such a respected brand in the real estate sector to offer a comprehensive debt finance platform.”
Debt investing is now recognised as being a key part of the real estate universe in Europe, having been prevalent in the United States for considerably longer. During 2017, private real estate funds in Europe raised €26.4 billion, of which €6.8 billion was allocated to debt funds, representing a rise of €1.6 billion on 2016.*
Citigate Dewe Rogerson
Patrick Evans / Stephen Sheppard
Tel: +44 (0)20 7638 9571