Global real estate funds management firm Agincourt Capital plans to launch this Thursday what it said is the first-ever offshore renminbi secured convertible bond fund for Australian residential and commercial real estate, and it is also in the process of structuring an RMB bond fund that will invest in certain New York City properties.
The NYC RE fund that is in the works will include both condominium buildings and retail, Craig Turnbull, CEO of Agincourt Capital, told this publication. The fund investing in Australian RE also could have appeal to investors in the U.S. market if they have a bank account in Hong Kong, he confirmed in an overseas e-mail response to an inquiry.
U.S.-based global investors with involvement in the U.S. mortgage market may have some interest in the fund investing in Australian RE because “it would give them access to the Australian property market, which is one of the best performing globally,” William Nobrega, managing partner with Agincourt’s independent adviser The Conrad Group, told this publication in response to an inquiry about this particular investor base. Also, the fund investing in Australian RE could appeal to these investors because it is denominated in a currency (the Chinese yuan) expected to appreciate against the U.S. dollar, he said.
Turnbull also noted in response to this publication’s inquiry that the initial 4% coupon of the bond fund investing in Australian RE is higher than domestic U.S. bond issues “and there is the conversion upside.”
In regards to the fund investing in Australian RE, Agincourt seeks to raise the equivalent of about 500 million Australian dollars ($534 million at the time of this writing) from a five-year bond in the form of senior secured debt with a yield of 4% per annum.
Agincourt said Deutsche Bank is the bond trustee and escrow agent for the fund investing in Australian RE, and Cushman & Wakefield and DTZ are its preferred real estate services providers.