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Dutch Mortgage Funding Company (DMFCO) launched a platform which enables institutional investors to directly invest in Dutch residential mortgage loans. Three large pension funds have agreed to invest over EUR 1.7 billion. NautaDutilh, a member of the EACCNY, acted as counsel to DMFCO and the pension funds and was responsible for the legal, regulatory and tax structuring and all documentation.
Together with three large Dutch pension funds, Pensioenfonds Metaal and Techniek (PMT), Pensioenfonds voor de grafische bedrijven (PGB) and Pensioenfonds Hoogovens, DMFCO will originate Dutch residential mortgage loans under the brand name Munt Hypotheken. The mortgage loans will be available through independent mortgage loan advisors, such as De Hypotheker, Van Bruggen Adviesgroep and HypotheekCompany. DMFCO expects the current investments to increase to EUR 3 billion. Several other Dutch pension funds have shown interest to participate as well.
Investing in mortgage loans is attractive as the yield is considerable higher than on other investments such as government bonds, while keeping a low risk profile. Jeroen van Hessen, founder of DMFCO, stated: “This initiative fits the trend of disintermediation with investors increasingly investing directly in attractive assets without the intervention of banks.”
The platform is considered to be innovative as it creates one of the first opportunities for institutional investors to directly invest in Dutch residential mortgage loans.
NautaDutilh regularly assists clients with similar investment perspectives, including Dynamic Credit Partners Europe, Syntrus Achmea, Apollo Global Management, GI Partners and Venn partners, all (save for Dynamic Credit Partners Europe and Syntrus Achmea) UK based private equity firms with an interest in the Dutch residential mortgage market.
See also: http://mena.nl/artikel/23479/private-equity-investeert-in-alternatieve-aanbieders-op-nederlandse-hypotheekmarkt ( Dutch only)
Media:
http://www.bloomberg.com/news/2014-09-19/dutch-pension-funds-plan-2-6-billion-investment-in-mortgages.html
http://fd.nl/Print/krant/Pagina/Weekend/787649-1409/drie-pensioenfondsen-komen-met-nieuwe-hypotheekaanbieder_bron_fd_krant ( Dutch only)
http://nos.nl/artikel/700325-pensioenfondsen-in-hypotheken.html (Dutch only)
http://www.telegraaf.nl/overgeld/huishypotheek/23101899/__Pensioenfondsen_storten_zich_op_huizenmarkt__.html
http://www.nu.nl/geldzaken/3882319/pensioenfondsen-stappen-in-hypotheken.html (Dutch only)
http://www.nvm.nl/actual/september_2014/pensioenfondsen_stappen_in_hypotheken.aspx (Dutch only)