Penny Blue Capital (“Penny Blue”), the independent, management-owned European real estate debt investment manager, today announced that Federated Hermes has become an investor in its flagship European real estate debt fund. Federated Hermes has acquired ESR’s interest in the vehicle as part of Penny Blue’s recent separation from ESR Europe.
The transaction marks another significant milestone for Penny Blue following its launch as an independent business, further strengthening the firm’s institutional investor base.
Founded by Beatrice Dupont and Paul House, Penny Blue has originated more than €5 billion of loans across Europe and established a strong track record through multiple market cycles. The firm specialises in loans secured against high-quality real assets, with a disciplined investment approach focused on capital preservation and delivering attractive risk-adjusted returns for institutional investors.
The business was recently set up after the debt platform was separated from ESR Europe, returning the business to management ownership, enabling Penny Blue to combine the entrepreneurial culture of a specialist investment manager with the institutional governance, investment discipline and experience developed over more than a decade.
Federated Hermes’ Private Credit business manages over $2bn of assets, providing investors with access to the leading loan opportunities in Europe. The Real Estate Debt business of Federated Hermes was launched in 2015 and seeks to deliver stable, uncorrelated, through-the-cycle returns from sustainable real estate assets, with a relative value approach to selecting opportunities, underpinned by an asset-focused and conservative underwriting.
Beatrice Dupont, Chief Executive Officer of Penny Blue Capital, said:
“We are delighted to welcome Federated Hermes as an investor in our flagship fund. Their decision to invest is a significant endorsement of the platform we have built over more than a decade, our disciplined investment approach and the strength of our team.
Over recent years, investor allocations have increasingly concentrated around the largest managers. We believe there is a compelling opportunity for a best-in-class boutique manager that combines closer access to the investment decision-makers, agility and alignment with the institutional governance, experience and track record that sophisticated investors expect. We believe Penny Blue offers the best of both worlds.
Our immediate focus is on continuing to deliver outstanding outcomes for our investors, and we are proud to have attracted Federated Hermes to join our flagship real estate debt fund.”
Vincent Nobel, Head of European Real Estate Debt at Federated Hermes, said:
“We are excited to have completed our first European real estate debt secondaries transaction with the purchase of an LP stake in the Penny Blue flagship fund. Our investment was driven by the quality of the portfolio in the fund, which we believe reflects disciplined underwriting, strong asset selection and attractive exposure to the sector. We look forward to working with the Penny Blue team as the fund continues to execute its strategy and as we continue to pursue interesting and attractive investment opportunities across senior real estate debt which deliver risk-adjusted returns for our investors in evolving market conditions.”
Paul House, Chief Investment Officer of Penny Blue Capital, added:
“We have just come through one of the most significant real estate repricing cycles in recent history, which by many measures has been comparable to the impact of the Global Financial Crisis on European real estate values. Against that backdrop, we are delighted to welcome Federated Hermes—a sophisticated and highly respected institutional investor—to our investor base. Their decision reflects confidence in our loan selection, borrower relationships and disciplined underwriting standards.
We continue to believe the European real assets debt market offers attractive opportunities for experienced specialist lenders. Our focus remains on maintaining a rigorous and disciplined investment process while continuing to be the dependable lending partner that both our investors and borrowers have come to expect. The addition of Federated Hermes is an important milestone for Penny Blue and reinforces our confidence as we continue to build the business for the long term.”
