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Caisse des Depots Raises Second Massive French Residential Property Fund

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Caisse des Dépôts (CDC), through its property arm unit CDC Habitat, raised over €900 million for Fonds de Logement Intermédiaire 2 (FLI 2) fund in its first round of raising. FLI2, an intermediate housing fund, seeks to have around €2 billion in assets. The portfolio manager of FLI 2 is Ampere Gestion, a subsidiary of CDC Habitat. CDC Habitat is France’s largest landlord with a portfolio of 346,000 units of housing under management. Some of FLI 2’s investors were investors in the first housing fund.

The fund plans to invest in 11,000 units of housing and fund developments throughout France, with an emphasis on the Paris metropolitan area.

Fonds de Logement Intermédiaire 1 (FLI 1) was launched on July 24, 2014 with equity of €515 million and a total investment capacity of €860 million. A second round for FLI 1 was finalized on June 29, 2015, increasing the fund’s equity to €1.045 billion and its total investment capacity to €1.8 billion. On November 3, 2015, the European Investment Bank (EIB) agreed to provide a 500 million line of financing for FLI 1. Some of FLI 1’s investors are Pro BTP Groupe, Aviva Investors, CDC, CNP Assurances, BNP Parbias Cardif, and MAIF Parnasse. Each of these investors committed over €100 million EUR to the fund.

Qatar Steps Up for Lebanon, Plans $500 Million Bond Purchase

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Qatar Sheikh Tamim bin Hamad Al Thani appeared at an Arab economic summit and it was revealed that Qatar plans to purchase US$ 500 million of Lebanese government bonds. Earlier, there was speculation Qatar was going to deposit US$ 1 billion in Banque du Liban (Bank of Lebanon), which was never confirmed by the bank.

Lebanese officials in January revealed the possibility of a debt restructuring. The International Monetary Fund calculated that public debt in Lebanon is at over 160% of gross domestic product this year and could raise to around 180% by 2023.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Turkey Wealth Fund Could Provide Support to Credit Card Debt Market

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Recep Tayyip Erdoğan, the President of Turkey, has a new reform to jump start the consumer debt-laden economy, and it involves Turkey’s sovereign wealth fund. His strategy is to offer money to those facing overwhelming credit card debt. Ziraat Bank (Türkiye Cumhuriyeti Ziraat Bankası) will allow borrowers to apply for debt rescheduling and secure lower interest rates. Erdogan announced that “Any retail client from any bank can apply.” Credit card debt is a monstrous problem in the country. Consumer credit has exploded due to low rates, government assistance, and easy credit availability. Last summer, non-housing debt reached US$ 97 billion. Half of this is credit card debt. Over US$ 30 million is non-performing. The debt was accumulated in foreign currencies, because they used to provide the lowest interest rates. Unfortunately, as the Turkish lira’s exchange rate cratered, much of the debt became impossible to service. The lira is among the world’s weakest currencies. Erdogan expects a smooth transition, “They will pay off their debt with a loan from Ziraat, and will pay it back according to the level of their monthly earnings.” Ziraat Bank is managed by Turkey’s sovereign wealth fund, which is chaired by President Erdoğan.

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KIC Sells City of London Office to South African Investor

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Investec Structured Property Finance, part of Investec, provided a £107 million loan to a South African investor being represented by London-based Pembrey Asset Management Ltd to acquire an office in London at One Bartholomew Lane. The Korea Investment Corporation (KIC) is the ultimate owner of the office and is selling it through Hines UK, part of Hines. BNP Paribas Real Estate acted on behalf of Pembrey Asset Management and CBRE acted on behalf of Hines.

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