Wells Fargo Shows Faith in Paloma with £35m Refinancing Deal

Paloma Capital, the fund manager co-founded by Joe Froud and Jack Pitman in 2015, has struck a £35m refinancing deal with Wells Fargo.

Manorside Industrial Estate, Redditch (pictured).

The loan is secured against six industrial estates acquired by the firm last year on behalf of its maiden fund Paloma Real Estate Fund I.

The assets – which include Manorside Industrial Estate, Redditch; Scotts Industrial Park, Rochdale; and Agility Logistics, Glasgow – were previously financed at the fund level through a £50m credit facility with Silicon Valley Bank, which was itself renewed last December.

Froud said the refinancing, which reflects a loan-to-value ratio of 60%, was its first debt facility from Wells Fargo. The fund’s other lenders are Santander and RBS.

“We are excited to be starting a new lending relationship with such an experienced real estate bank,” said Froud, who was managing partner of Columbus Capital Management before co-founding Paloma Capital with Pitman, who was a director at Helical.

2m sq ft warehouse portfolio

Since starting to invest on behalf of its first fund early last year, Paloma has built up a warehousing portfolio of more than 2m sq ft. The portion covered by the Wells Fargo loan totals about 900,000 sq ft.

“This loan demonstrates our appetite for providing senior debt to experienced sponsors in the industrial sector and we look forward to working further with Paloma in the future,” said Duncan Parvin at Wells Fargo.

Paloma, which has a value-add investment style, is targeting a capital raise of about £150m for its first fund, which would give it the firepower to invest more than £300m.