This article is from the Australian Property Journal archive
MACQUARIE is seizing on strong tailwinds in Australia’s real estate private credit market by investing in Melbourne-based specialist IDA.
Macquarie Real Estate Partners’ investment will provide additional funding to IDA to support the continued growth of its specialist real estate private credit platform.
James Kemp, head of real estate Asia Pacific, Macquarie Asset Management, said Macquarie is focusing on sectors that are supported by structural tailwinds and then find the best business or team in that sector to partner with.
“We look for management teams that can differentiate themselves in their market and our successful track record of investing in and growing these specialist operators allows us to be very selective.
“We believe IDA is well positioned to grow its platform and capitalise on the increasing demand for flexible development financing solutions while offering compelling investment opportunities for its clients. IDA’s long standing track record demonstrates the management team’s ability to price and manage risk through cycles,” said Kemp.
Under the deal, IDA’s founding partners Adam Kaye, Robbie Fallon and Jeremy Urbach will retain majority ownership and continue to lead IDA’s day-to-day management.
Founded in 2010, IDA specialises in providing mid-market real estate private credit and financing solutions and has been a capital partner in over $5 billion of projects across more than 100 investments.
Kaye said IDA remains focused on seeking to deliver attractive risk-adjusted returns for its client base across Private Credit, High Yield and Land Syndication & Community Creation investment strategies, whilst leveraging the growing demand for Australian real estate development financing which is underpinned by a structural undersupply of housing and reduced availability of traditional bank financing for developments.
“This strategic investment by MREP validates the quality and strength of our platform and will enable us to significantly enhance our offerings to our valued investment clients whilst also offering our borrower clients even greater flexibility, certainty and speed.
“MREP’s investment in IDA is testament to the quality of our organisation and our people. We welcome the opportunity to partner with a fund managed by a leading global specialist asset manager to grow IDA’s capabilities in Australia,” he added.
Macquarie’s investment comes as the Australian private capital market reported a staggering 33% growth over the past 18 months with assets under management reaching $139 billion as at April 2024.
The market expected to grow further as developers across Australia increasingly prefer to source finance from non-bank lenders after the major banks withdrew from the market.
The withdrawal of the major banks created a void for private credit to step in both locally and internationally.
International investors such as Apollo Global Asset Management read the market early on and invested in one of the country’s largest players, MaxCap Group, which has more than $8 billion in funds under management.
Meanwhile Macquarie’s investment comes just days after Singapore’s CapitaLand Investment announced it would acquire Wingate for $200 million.
These latest players join a growing list of investors entering the market, including Warburg Pincus’s $490 million investment in MA Financial’s $1 billion Real Estate Credit Vehicle and PGIM Real Estate.
David Di Pilla’s HMC Capital, with ambitions to build a $5 billion private credit platform, acquired Payton Capital earlier this year in a $127.5 million deal, while $12.2 billion specialist alternative investment manager Regal Partners acquired Adrian Redlich’s commercial real estate lending business Merricks Capital for $235 million.
Centuria Bass – which has grown to circa $2 billion in funds under management – recently secured a new circa-$150 million warehouse facility with an initial $100 million backing from global investment bank UBS, and Centuria increased its interest in Centuria Bass in April to 80% for a consideration of $57 million, whilst the Abu Dhabi Investment Authority (ADIA) is backing Qualitas.
