JV announced between property financier and leading NZ investment bank and wealth management firm
More capital for property development projects is to be a key outcome of a new 50:50 joint venture between property financier, Pearlfisher Capital, and leading investment bank and wealth management firm, FNZC.
The partnership between FNZC and Pearlfisher Capital (“Pearlfisher”), is FNZC’s first step into the direct property asset class and is one that will see Pearlfisher grow and enable co-investment in its lending activities alongside third party investors.
Pearlfisher currently offers funding to the market through high net worth individuals and trusts participating in transactions that suit their specific risk appetite. It also provides advisory and origination services including arranging traditional bank debt for its borrower clients.
Pearlfisher has funded a variety of developments since its inception six years ago, including numerous residential land subdivisions, multi-unit town houses, high rise apartments and suburban retail developments.
As part of the joint venture, FNZC will be represented on Pearlfisher's Board providing valuable additional governance and structure as well as access to a significantly wider funding base.
The principals of Pearlfisher Capital, Tony Abraham and Jarrod Bruce, say the partnership is an important step for the business and the industry overall as it is a change that will provide the potential for Pearlfisher to gain some considerable scale in the medium term and assist with the markets current non-bank funding constraints.
“Having our own capital to co-invest in projects will be an important development for the business, and will attract a broader and more diverse range of investors.
The partnership allows us to take advantage of the strong development cycle and consider a wider range of projects in a climate when the major banks are increasingly constrained by capital adequacy rules, compliance and tightening credit criteria.
The net result being we will be able to assist in funding more projects at a time when there is a demand for the delivery of additional housing.”
Managing Director, Head of Securities at FNZC James Lee says the partnership provides FNZC with an exciting growth avenue that diversifies its client offering into a market many of our clients do not currently have access to.
“Property remains New Zealand's largest investment class, for many of our clients it is their largest asset exposure. The macro trends of a structural under-build, record immigration and the recent changes in the availability of bank funding will continue to provide disciplined lenders, with attractive risk / reward opportunities.”
“From that perspective, this is a valuable opportunity for us. The team at Pearlfisher are highly regarded by some of our existing clients and the wider finance market and their strategy of being client first, transparent and disciplined in their risk assessment closely fits with our firm's approach of client focus and wealth creation.”