LONDON (Reuters) - Private equity giant Blackstone Group has led a 94 million pound equity raising for a fund that lends to housebuilders in Britain, where there is an acute housing shortage particularly around London.
Britain needs to build 235,000 new homes a year to keep up with demand, but only 122,590 new homes were built in 2013, government estimates show.
While the government has boosted demand by launching a scheme to lend and guarantee mortgages to struggling home buyers, many smaller housebuilders have spoken of difficulties in obtaining finance.
Funds managed by Blackstone, real estate fund manager Clearbell Capital and other institutional investors raised the cash for Pluto Finance, a lender which provides builders with senior loans of up to 90 percent of the development’s cost, with a minimum loan size of 10 million pounds.
The fresh equity adds to 100 million pounds which Pluto Finance raised last year. Blackstone was involved in the first fundraising but did not reveal its participation at the time, a spokesman for Pluto Finance said. It has now contributed more than half of the 194 million pounds of Pluto Finance’s equity.
“We clearly see the difficulty that homebuilders small and large alike are facing in getting full funding for quality schemes with planning consents,” Chad Pike, senior managing director at Blackstone, said on Friday.
The cash gives Pluto Finance the scope to lend 360 million pounds to residential developments in London and the south of England over the next four years.
Reporting by Brenda Goh; Editing by Ruth Pitchford