11.06.10

By James Whitmore

Credit Suisse to transfer European loan book and its management team

Credit Suisse has agreed to spin off its European real estate loan book and the team that manages it to indirect real estate investment manager, Forum Partners.

The investment bank has signed a letter of intent with Forum for the transfer of the entire loan book, as well as the employees of the team, led by Todd Hirsch, to Forum.

It holds roughly SFr2.7bn (£1.6bn) of commercial property loans, which had been lined up for securitisation through the CMBS (commercial mortgage-backed securities) market before the property crash three years ago.

Credit Suisse had been one of the most active “conduit” lenders during the boom, through its Titan vehicle, but ended up with a backlog of loans after the market for securitised debt dried up in the wake of the credit crunch.

The London-based European Real Estate Finance, which numbered 30 staff before the credit crunch, has been reduced significantly. It is headed by Todd Hirsch, a London-based managing director in the investment banking division, working alongside Ian Marcus, the European head of the Real Estate Group.

Hirsch took on the top job in June 2007, just weeks before the onset of the credit crunch, replacing Don Belanger, who left for UBS. Before that he had spent 10 years in New York, originating CMBS and real estate loans.

The deal with Forum will end Credit Suisse’s real estate lending activities in Europe. Last year it sold a €2bn portfolio of debt to Lone Star Funds, the US fund manager. And in 2008 it sold a portfolio, secured against office and retail properties across Germany, Switzerland, the UK and Spain, to GE Real Estate for €642m For Forum, which is being advised by Cushman & Wakefield, the deal would be its second with an investment bank. In July last year it took over Citi’s global real estate securities business, which comprised a $450m portfolio and a team of 13 people, led by Dan Pine.

The company was set up in 2002 by three former Security Capital directors, Russell Platt, Andrew Walker and Caroline McBride.

A few months earlier, it had recruited the veteran real estate investment banker Richard Cotton to help invest its new €443m European fund.

The fund aims to provide equity to cash-starved property companies and funds, by way of convertible debt and preference shares, in line with its previous funds.

Forum has more than 50 employees in six offices across Europe, North America and Asia, and manages $2bn of investments through five funds.

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Source: Property Week (www.propertyweek.co.uk)