Australian alternative real estate investment manager Qualitas has established a real estate private credit platform in Europe with the acquisition of a local team.
Qualitas has agreed to buy the investment management business of UK-based Starz Real Estate, providing it with an established team in Europe that manages an existing loan portfolio backed by institutional capital and with in-house capabilities across origination, asset management, finance and legal functions.
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Starz, which was founded in 2018, is a UK-based commercial real estate (CRE) private credit manager overseeing a £376m CRE credit portfolio across the UK and Europe.
Qualitas’ newly-established European division will assume management of the existing portfolio, comprising 11 investments, and will be positioned it to originate and deploy capital across multiple European jurisdictions.
The total financial consideration for the acquisition is A$36.5m (£19.2m), which will be met from Qualitas’ existing cash reserves.
Of this, A$28m is for the purchase of the Starz co-investment positions held by the manager, while the remaining A$8.5m of the consideration is for the purchase of the net positive working capital, most of which is in the form of cash currently held by Starz.
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“The UK and European commercial real estate lending market is more than five times the size of Australia, providing a significant opportunity to expand our private credit platform in a large and highly developed market,” said Andrew Schwartz, co-founder and group managing director of Qualitas.
He added that the combination of an experienced local team, “synergistic” institutional relationships and Qualitas’ proven investment approach positions it to capitalise on growing demand for private credit, as traditional financiers’ participation continues to decline.
