A TRIO of Scottish investors has joined forces with one of New York’s most-powerful hedge funds to buy an estimated £250 million debt package from Royal Bank of Scotland.
Urbicus, a specialist debt business set up by former Noble Group chief executive Ben Thomson and Hazeldene’s Mark Shaw, has teamed up with Elliot Associates to acquire part of a debt that backed the troubled Glanmore property fund.
Marcus Rennie, a former senior lending manager for Anglo Irish Bank, is also a director of Edinburgh-based Urbicus.
Other investors have also backed the deal led by Urbicus and Elliot, which is controlled by Wall Street billionaire Paul Singer. RBS was owed about £300m when the assets of the Glanmore Property Fund were frozen on fears it faced a drastic collapse in value.
The Dublin-listed fund, managed by Tilney Asset Management, part of Deutsche Bank’s wealth management division, was worth close to £1 billion when investors were barred from redeeming their investments in 2008.
A re-valuation of the fund’s asset in June saw its value collapse from £578m to £385m after it had already made sales in efforts to keep up loan repayments.
At the start of the year, the fund had around £350m of debt held against it, including £260m owed to RBS.
In January, lenders RBS and Canada Life agreed to extend loans to the open-ended trust until 2015 and 2014, respectively.
The deal with Urbicus marks an exit for RBS ahead of the loan extension. It is thought that Urbicus would not have paid a large discount on the value of the debt as equity in the fund is estimated to be slightly higher than the value of the loans.
The deal was not thought to include the £60m debt held by Canada Life.
As at 31 July, the Glanmore fund owned 39 assets.
Property consultancy CBRE was appointed in July to sell off another portfolio of properties owned by the fund, which was dubbed “project tiger”.
The portfolio is thought to be made up of ten office buildings, three industrial assets and two retail assets, including: the Icon, an office building in Stevenage, Apex House, an office block in Birmingham, and an Eddie Stobart industrial unit in Yorkshire.
A spokesman for Urbicus said: “We can confirm Urbicus, with the backing of a number of investors, has acquired the debt of Glanmore Property Fund, and is now acting as lender.”
He said the “project tiger” sale was “not as a result of a change of lender, but that the fund continues to operate as before”.
Urbicus was established in 2011 to acquire and manage property-backed loan portfolios. Its first deal was in 2011, when it bought the £300m Scottish loan book of Anglo Irish.
According to magazine Forbes, Singer is estimated to be worth $1.3bn and his hedge fund oversees $21bn in assets.