OakNorth Bank completes £45m capital call facility for private equity real estate investor, Paloma Capital

By Bridging Loan Directory 18th September 2023

OakNorth, the neobank for entrepreneurs, by entrepreneurs, has provided a £45m Revolving Credit Facility (RCF) to Paloma Capital, a leading entrepreneurial private equity real estate investor.

Founded by Joe Froud and Jack Pitman, Paloma Capital has raised a total of c.£440m of wholly discretionary capital in three value-add Funds since 2015, mainly from institutional investors in the UK, Europe, and the Middle East.

It has raised £120m out of a target of £200m for its latest fund, Paloma Real Estate III, mainly from existing investors in Paloma Real Estate I and II.

Paloma Real Estate III will have an opportunistic strategy and can invest across all sectors and regions.

Although, as with its two previous funds, it will focus primarily on income-producing, multi-let urban industrial and logistics schemes, as well as trade counter, open storage, self-storage and EV charging assets, in addition to a small allocation to value-led retail warehouse investments.

Target assets will typically have the potential to add value from capital investment and active management, concentrating on relatively small lot sizes of £5m to £15m.

Jack Pitman, Founding Partner of Paloma Capital, commented:

“The OakNorth facility means we can draw down up to £45m on only 48 hours notice, which is great if opportunities come up to buy assets quickly.

It also allows us to bridge the gap between completion and the drawdown of senior debt at a later stage.

Having worked closely with Mohith and the OakNorth team, we are delighted with the effort they have made to understand our requirements and their willingness to design a package that was tailored to our specific needs.

They have been very responsive throughout and managed to document the transaction within a week of receiving credit approval, which was exceptionally quick and exactly what we needed.”

Mohith Sondhi, Senior Director of Debt Finance at OakNorth, added:

“Both Jack and Joe are industry stalwarts with 30+ years of experience investing in UK real estate.

Paloma Capital has built up a hugely impressive track record of significant outperformance of the UK market, through astute market segment rotation and a unique focus on repositioning smaller overlooked assets.

This transaction represented an exciting opportunity for us to provide a capital call facility to a well-sized fund with a list of strong limited partnerships behind them, including large funds and trusts, as well as an array of reputable high-net-worth individuals.

We look forward to supporting Paloma Capital on future transactions, as we look to further highlight our expertise operating within the UK’s fund finance market.”