Lionheart Strategic Management and Schroders Investment Management enter into a loan purchase agreement for $ 250 million in real estate loan investments
NEW YORK, January 19, 2021 / PRNewswire / – Lionheart Strategic Management LLC (Lionheart), a Fisher Brothers subsidiary that manages capital on behalf of third party investors, has partnered with Schroder Investment Management North America Inc $ 250 million in transitional and distressed home loan investments. The company will participate in transactions, raise and service credit opportunities through Lionheart Real Estate Credit Strategies LLC.
As a subsidiary of Fisher Brothers, a fourth generation real estate owner and operator, Lionheart is uniquely positioned with its extensive operations, development and management support functions.
“We see incredible opportunities in the market because of the pandemic and its impact on commercial property markets,” said Winston Fisher, Chairman of Lionheart Strategic Management LLC. “Today, the need for a capable capital partner is more important than ever and we are well positioned in this regard. Our added value as a lender gives senior lenders the peace of mind that the mezzanine position is supported by a full-service real estate company capable of providing operational knowledge to complex construction projects. We continue to see high quality investment opportunities backed by strong borrowers in fundamentally healthy markets with significant downside protection given our targeted leverage points, locations and property types. We are optimistic about the prospects for an economic recovery over the long term, but we are well positioned should that recovery take longer. “
The COVID-19 pandemic has caused CMBS loan default rates to reach Great Recession levels, creating a need for capital to provide liquidity to the market. According to Fitch Ratings, the default rate for fixed income CMBS rose to 16.5% in the first half of 2020, nearing the previous high of 16.8% in 2013. Fitch previously predicted that cumulative defaults will hit 19% by the end of the year. Lots of almost $ 700 billion of the construction loans granted in 2018 and 2019 will experience delays due to supply chain and labor issues that are causing these businesses to become out of whack and provide opportunities to provide rescue capital to undercapitalized sponsors. Upon completion or maturity, the assets will face dramatically different operating bases and a constrained market for transitional asset financing.
Michelle Russell-Dowe, Head of Securitized Loans for Schroders said, “We are excited to be working with Lionheart to expand our sourcing and service network. We believe they are well positioned to assist us in allocating opportunistic investments. Our loan acquisition agreement with Lionheart enables Schroders to continue deploying capital through partnerships with real estate. “Experts with shared credit discipline and patience.”
Christopher Peck, Peter Rotchford, Andrew Scandalous, David Giancola and JLL Global Capital teams advised Lionheart on raising capital for this strategy. Paul Hastings LLP acted as legal advisor on behalf of Lionheart and Ropes & Gray LLP represented Schroders.
About Lionheart Strategic Management LLC
Lionheart Strategic Management, LLC is an asset management company founded in 2017 as a subsidiary of Fisher Brothers to manage investments for individuals of the company and on behalf of third party investors seeking exposure to real estate strategies with an emphasis on major urban markets within The United States. For more information on Lionheart, see lionheartstrategic.com.
About Schroder Investment Management North America Inc.
As a global investment manager, we actively and responsibly manage investments for a variety of institutions and individuals to help them meet their financial goals and prepare for the future. The world is constantly changing, and with our customers at the center of everything we do, we understand the need to continually adapt and develop our business around what is most important to our customers today and in the future.
Our continued success is based on many years of experience and expertise, where we work with our customers to develop innovative products and solutions in our five business areas, consisting of Private Assets & Alternatives, Solutions, Investment Funds, Institutional and Wealth Management, and in a broad range Range of assets and regions. By combining our commitment to active management and a focus on sustainability, our strategic capabilities are designed to deliver positive results for our customers.
We are responsible for $ 649.6 billion* Client assets managed locally by 42 investment teams around the world. As a global company with over 5,000 talented employees in 37 locations, we are able to stay close to our customers and understand their needs. We have over 200 years of investment and innovation experience and we continue to be committed to creating a better future by investing responsibly for our customers.
Schroder Investment Management North America Inc. (SIMNA Inc.) is registered as an investment advisor with the SEC. It offers its clients wealth management products and services The United States and Canada. Schroder Fund Advisors LLC (SFA) markets certain investment vehicles for which SIMNA Inc. is the investment advisor. SFA is a wholly-owned subsidiary of SIMNA Inc. and is registered with FINRA as a dedicated broker-dealer. SIMNA Inc. and SFA are indirect wholly-owned subsidiaries of Schroders plc, a UK public company with shares listed on the London Stock Exchange. More information about Schroders can be found at www.schroders.com/us or www.schroders.com/ca. Schroder Investment Management North America Inc., 7 Bryant Park, New York, NY, 10018-3706, (212) 641-3800.
More information about Schroders can be found at www.schroders.com/us.
*Away June 30, 2020
CONTACT: [email protected]
SOURCE Lionheart Strategic Management, LLC