Sterling to advise on the property of the lender Shore

ByPan Kwan Yuk

Published: March 2, 2008 20:13 | Last updated: March 2, 2008 20h13

Lord Sterling, the shipping magnate and property, has teamed up with Shore Capital, the boutique investment bank and fund manager, advising on a new fund that will lend to and invest in properties trade, mainly in France and Germany.

The new fund, which aims to raise up to $ 500m (£ 251m), is part of an increasing number of vehicles seeking to capitalize on the weaker commercial real estate markets.
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Barely 73 years by peers, which is perhaps best known for his 21 years of residence as P & O executive chairman, is to become an adviser to a new investment fund that is creating Shore .

The vehicle, known as Puma Fund, will provide mezzanine financing for entrepreneurs who want to take advantage of the weakness of the market and are unable to obtain loans from traditional sources. It will also buy real estate assets underestimated directly from distressed sellers.

Howard Shore, CEO, said: "We are witnessing a deficit. The banks simply do not have the cash to put money in major development projects, even if, in countries such as France and Germany, the property fundamentals remain more favourable than in the United Kingdom or Spain. "

He believes that the next 18 months will offer great opportunities for hunting bargains and said the addition of Sterling Lord was a huge coup for the company.

Lehman Brothers has already committed $ 50m to the fund, while Shore itself will be the vehicle for sowing 5 percent of the amount raised.

As the world continues to claim credit crunch scalping some of the country's most venerable financial institutions, market turbulence has proved to be good news for companies such as mezzanine lenders, struggling to find alternative forms of financing , to turn to them for capital.

While many specialty lenders have announced the creation of the new mezzanine fund in the past few months, Côte-vehicle will be among the first to focus exclusively on real estate.

The young Jeffrey Sterling first made his mark in the business world, but not in the maritime transport as a banker and real estate developer when its warranty Sterling Trust intervene to save another real estate company, Town & City, during the real estate crisis of the 1970's.

His fortune has become intertwined with those of P & O in 1983 when he took over as chairman of a defense against a takeover bid from Trafalgar House, a rival conglomerate.

As chairman of P & O, Lord Sterling has been instrumental in restructuring the group, transforming it from a conglomerate badly with a series of shipping companies in a container ports and ferries company.

It is thought to have about £ 10m DP World's acquisition of the company nearly 2 ½ years.

Mr. Shore said Lord Sterling will use his experience and contacts to guide the investment strategies of the fund.

Ralf Nocker, former co-head of principal investments in real estate at Bear Sterns in London, will be responsible for the daily operation of the fund.