Blackstone inks £2bn funding partnership with Pluto Finance
Blackstone has agreed a £2bn funding partnership with UK development and bridging lender Pluto Finance.
The partnership will focus on development and investment loans ranging between £25m to £100m in size, with an initial target deployment of £2bn over two years.
The strategy will primarily target opportunities in logistics and living sectors such as rental and for-sale housing, purpose-built student accommodation and co-living in the UK and across core markets in continental Europe.
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The partnership combines Blackstone Real Estate Debt Strategies’ (BREDS) scale and deep real estate expertise with Pluto’s borrower network and existing origination and structuring capabilities in the mid-market lending space, the companies said.
“Pluto Finance has an established and successful track record in small-to-medium balance real estate lending, and we are excited to partner with them to bring institutional capital to an otherwise underserved market,” said David Gorleku, head of BREDS Europe at Blackstone.
“As a platform, we continue to broaden our investment approach, and we view this as an attractive opportunity to expand our lending capabilities into the mid-market segment where we see compelling relative value.”
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There is increasing demand for private credit solutions in Europe’s real estate sector.
With around €1tn (£0.87tn) of commercial real estate debt outstanding and €310bn in annual origination, the European market is increasingly turning to alternative lenders as banks shrink their exposure to real estate debt, according to the companies’ statement.
Additionally, a housing shortage creates lending opportunities in the living sectors.
“We are seeing significant demand from borrowers across Europe for private credit funding to support investment in mid-market property assets and developments across multiple sectors,” said Ciaran Singh, managing director Europe, at Pluto Finance, who joined earlier this year.
“This hugely exciting partnership with BREDS means that we will be able harness Pluto’s origination, structuring and management expertise to deliver debt solutions to meet this growing demand.
“Our in-country teams have deep knowledge of our core continental European target markets, and we look forward to building on our strong track record in the UK, where Pluto has lent nearly £3.4bn across more than 300 transactions.”
