Key Takeaways
- • APG has committed US$400m (€343m) to a new discretionary mandate with Australian non-bank lender MaxCap, its third mandate with the firm since 2019, according to IPE Real Assets.
- • The mandate targets first mortgage loans across all real estate sectors, with a primary focus on the living sector, and retains flexibility across other sectors and the property lifecycle.
- • With this commitment, APG has entrusted MaxCap with a total of A$1.3bn (€790m) for construction lending.
- • MaxCap reports a current real estate credit pipeline of more than A$8bn, and its chairman Wayne Lasky says recent residential investment tax changes will not affect new builds.
- • APG frames the deal as an expansion of its private credit portfolio beyond Europe and the US, citing Australian commercial real estate credit as a source of long-term risk-adjusted returns.
Summary
Dutch pension asset manager APG has committed US$400m (€343m) to a new discretionary mandate with Australian non-bank lender MaxCap, according to IPE Real Assets. The mandate is APG's third with MaxCap since 2019 and is designed to invest in real estate debt. It will continue to focus on first mortgage loans across all real estate sectors, with a primary emphasis on the living sector, while keeping flexibility to invest in other sectors and across the property lifecycle.
APG head of alternative credits Menno van den Elsaker said the mandate forms part of APG's broader private credit allocation and reflects the firm's conviction in real asset credit as an attractive source of long-term risk-adjusted returns for its pension fund clients. He said Australian commercial real estate credit continues to offer compelling opportunities, supported by strong market fundamentals and an established lending environment. He added that the investment further diversifies APG's private credit portfolio into regions outside Europe and the US.
With the new commitment, APG has entrusted MaxCap with a total of A$1.3bn (€790m) to deploy into construction lending, which the firm says supports housing stock across Australia. MaxCap executive chairman Wayne Lasky said the earlier mandates provided a strong foundation for this next phase, which places greater emphasis on the full asset lifecycle. He cited a structural opportunity in Australian real estate credit driven by housing undersupply and strong population growth.
On the current Australian housing downturn, Lasky said property markets move in cycles and that Australia has historically experienced shorter, more contained peak-to-trough corrections than other developed markets. He noted that since 2000, the average Australian downturn has seen prices fall around 4% over roughly 14 months, about half the magnitude of the average US downturn of 8% over a similar 13 months. He said current conditions are consistent with that pattern. MaxCap's real estate credit pipeline remains above A$8bn, and Lasky said recent changes to residential investment tax would not apply to new builds.
APG head of alternative credits Menno van den Elsaker said the mandate forms part of APG's broader private credit allocation and reflects the firm's conviction in real asset credit as an attractive source of long-term risk-adjusted returns for its pension fund clients. He said Australian commercial real estate credit continues to offer compelling opportunities, supported by strong market fundamentals and an established lending environment. He added that the investment further diversifies APG's private credit portfolio into regions outside Europe and the US.
With the new commitment, APG has entrusted MaxCap with a total of A$1.3bn (€790m) to deploy into construction lending, which the firm says supports housing stock across Australia. MaxCap executive chairman Wayne Lasky said the earlier mandates provided a strong foundation for this next phase, which places greater emphasis on the full asset lifecycle. He cited a structural opportunity in Australian real estate credit driven by housing undersupply and strong population growth.
On the current Australian housing downturn, Lasky said property markets move in cycles and that Australia has historically experienced shorter, more contained peak-to-trough corrections than other developed markets. He noted that since 2000, the average Australian downturn has seen prices fall around 4% over roughly 14 months, about half the magnitude of the average US downturn of 8% over a similar 13 months. He said current conditions are consistent with that pattern. MaxCap's real estate credit pipeline remains above A$8bn, and Lasky said recent changes to residential investment tax would not apply to new builds.
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