Nomura International's London-based asset finance group is creating a fund to buy mezzanine classes of securitizations and bank loans the firm underwrites. The fund, which will be roughly E750 million, will begin buying securities sometime next year, says Gary Wilder, co-head of asset finance in London. Nomura is currently in talks with potential investors for the fund, he adds.
Nomura plans to use the fund to acquire mezzanine classes of securitizations that are done to refinance acquisitions. Previously, the firm had held similar investments on balance sheet. Nomura will continue to use its own balance sheet to finance acquisitions, as it has done in the Laurel Pubs and Center Parcs transactions. Those were real estate deals in which the firm was involved.
The asset finance group plans to underwrite real estate transactions similar to the pub deals it has already done, as well as expand into other areas such as whole business securitizations.
The fund's creation comes as Nomura has combined its real estate finance and securitization groups into an asset finance unit following the departure of Tariq Rafique last month. He had been head of securitization. Derek Vago is the asset finance group's other co-head.
Wilder says another new facet of the asset finance business will be to provide seed capital and warehousing facilities for non-performing loan investors and other real estate-related ventures. For example, Nomura might provide seed capital for a NPL fund that would then securitize its holdings, similar to Morgan Stanley's ELoC program. Wilder says the asset finance group may even fund a start-up mortgage lender, which would eventually tap the securitization market for funding.
--Rachel Wolcott
