Citibank and Mazabi set up a Spanish real estate investment club

Today (4th December 2014), Expansion, the Spanish financial newspaper has published an article stating that Citibank has recently commenced a joint venture with Mazabi, a Spanish investment company. The stated objective is to invest €400 million in real estate in Spain, with a target return of 15%.

Citibank has identified Spain as an attractive country for investment, and many large international players have already invested heavily in the Spanish market. To profit from this demand, especially for real estate, Citibank has set up the investment club aimed at High Net Worth individuals (HNWI’s) from all around the world.

Fernando López Muñoz, Director of Global markets for Citi Private Bank for Spain, Italy, Portugal, Latin America and EMEA, has explained that “this club intends to invest a minimum of €200 million in Spain, which could be leveraged to €400 million.”

The club has three years to invest the capital with a possible extension of two years. However, Lopez has indicated that most of the investments will be committed during 2015 and the first six month of 2016.

The Investment Club comprises capital from some 15 to 20 families with a minimum net worth of €100 million each. These families have committed to invest €10 million each in opportunities which have already been identified by Mazabi. However, individual investors are not obliged to invest since they join the club on the basis of a soft commitment. Most of the identified investment opportunities are located in Madrid and Barcelona although some are located in Bilbao, Valencia, Seville and other provincial capitals.

Most of the club members are from Latin America and the Middle-East, but there are also investors from the USA and Europe. The vehicle is projected to last for five to seven years with an expected annual return of 15%.

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