The New Credit Providers

November 22, 2013 by Simon Meads

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Above: Hilton Hotel London. In 2011 GIC loaned Blackstone $160 million to buy Mint Hotels (Now part of Hilton Worldwide). SOVEREIGN WEALTH FUNDS are becoming bold lenders now that banks have pulled back. When Oslo-based Norges Bank Investment Management (NBIM), manager of Norway’s Government Pension Fund Global (GPFG), signed a deal in October with Paris-based insurance company AXA’s real estate arm to set up a joint venture to lend money to buyers of large top-quality properties, it sent a powerful signal to credit-starved companies that sovereign wealth funds were open for business. As banks and other providers of unconstrained capital have moved away from making direct loans in the wake of the financial crisis, sovereign wealth funds — which oversee approximately $4.5 trillion in assets — are stepping up. NBIM isn’t the first state investor to move into property lending. Although Singaporean sovereign wealth funds GIC and Temasek Holdings dabbled in the…

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