Warburg Pincus to build real estate credit platform

Warburg Pincus says it will provide more flexible and responsive forms of real estate financing for small-to-medium sized businesses across the Asia Pacific region.

Warburg Pincus is venturing into the Asian real estate credit market and has appointed an industry veteran to develop the business.

On Tuesday, the private equity firm named Gregory Wells as entrepreneur-in-residence, which means he will both build up the venture and put some of his own capital to work in it.

Wells, who has over 30 years of experience in the real estate industry, told FinanceAsia of his plans to develop a real estate credit platform that provides tailor-made financial solutions to borrowers.

“We expect to be quicker and more flexible in real estate financing for some tricky and complicated transitional assets, where regular banks would mostly shy away from,” Wells said in a phone interview.

He added that targeted borrowers would likely be small-and-medium-sized enterprises, which often struggle to secure bank loans, and that Warburg Pincus is looking to acquire existing property credit platforms to grow the business.

Wells joins Warburg Pincus from asset management firm Forum Partners, a global real estate investment manager. He worked there as the managing director and head of Asia Pacific. Prior to this, he worked at Deutsche Bank’s regional commercial real estate group and also for Morgan Stanley’s real estate funds in Asia.

The initial focus of the business will be on China, Australia and, later, India, but could spread to other markets in time, Wells said.

Wells believes long-term trends underpin the credit-worthiness of Asian property markets such as urbanisation and Asia's growing middle class.

“Each country has its own cyclical real estate issues,” Wells said. “But, generally speaking, we see a long-term fundamentally bullish real estate across the region.”

“The Chinese market has become increasingly sophisticated and developed over the last 20 years,” he said.“The economy may have slowed recently, but China growth still has a long way to go, as it continues to be the manufacturer of the world and we don’t see the main drivers changing any time soon."

Warburg Pincus has 14 years of history in real estate investing in Asia. The firm has invested a total of $4 billion in the Asian real estate market and is now managing $93 billion of assets.

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