Macquarie launches secure income real estate strategy targeting commercial ground leases

Macquarie Asset Management (“Macquarie”) will expand its private credit offering with the launch of a secure income real estate strategy initially targeting investment opportunities in commercial ground leases.

Ground leases enable commercial property owners to raise permanent capital for their businesses through the sale of the freehold interest of their assets whilst retaining both operational freedom and the flexibility to raise debt against their remaining long leasehold interests. Ground leases also represent an attractive investment proposition for investors such as pension funds and insurers, offering secure, long-term income streams to match their long-dated liabilities.

Two senior appointments have been made to drive the development of the new strategy, with Hugo James and Tom Benham joining Macquarie in London as a Managing Director and Vice President, respectively. Joining Macquarie from Alpha Real Capital LLP, Hugo James was responsible for the launch and growth of the boutique investment manager’s institutional secure income and commercial ground leases businesses supported by Tom Benham.

Hugo James, Managing Director at Macquarie, said: “Interest in secure income real estate strategies has grown rapidly as investors seek to diversify their portfolios and access returns that are no longer available via high quality corporate and government bonds. We are pleased to bring this offering to Macquarie’s clients and look forward to partnering with commercial real estate owners to help meet their individual financing needs.”

Hugo James will lead the secure income real estate strategy reporting to Kit Hamilton and Tim Humphrey, Managing Directors in Macquarie’s Private Credit team. The strategy will bolster Macquarie’s existing private credit offering which connects long-term institutional capital with opportunities to finance essential economic and community infrastructure. Macquarie’s Private Credit team has raised more than £8 billion from investors across a diverse range of strategies since 2012.

Tim Humphrey, Managing Director at Macquarie, said: “The addition of secure income real estate represents the natural next step in our goal of offering clients a range of differentiated private credit capabilities. We are pleased to welcome Hugo and Tom to the team and are confident their specialist expertise, combined with the considerable resources of our existing lending business, will enable us to quickly establish a strong presence in the market.”