John McBain, Giles Borten, Jason Huljich and Nick Goh Centuria Bass Capital
Left to right: John McBain, Giles Borten, Jason Huljich and Nick Goh. Image – Supplied.
  • CNI secures 50% of Bass Capital in $24M joint venture
  • Option for complete take over available in five years
  • Transaction will be accretive for FY22 earnings

Centuria Capital Group (ASX: CNI) has had a strong start to 2021, with a successful bookbuild in March that aimed for $100 million, but ended up seeing $190 million in listed notes issued.

Earlier this week, CNI announced its proposal to take over Primwest (ASX: PWG) in what could be a $600 million deal. The merger will likely become one of the largest real estate fund managers in Australia, with assets worth some $15.5 billion.

Who is Bass Capital?

Established in 2016, it is an “experienced real estate debt fund provider”, or in other words a “middle-market investor and alternative asset manager”.

The founding partners of Bass Capital are former UBS European Head of Leveraged Finance and Debt Capital Markets, Giles Borten, and former Managing Director of Wingate and Gresham Partners, Nicholas Goh.

In a statement, Centuria said, “To date, Bass Capital has delivered an average internal rate of return (IRR) of more than 12% per annum. Its strong financial performance has translated to an average 100%+ Compound Annual Growth Rate (CAGR) in EBITDA since the business was established.”

Details of the joint venture

Centuria Capital Group said it had secured a 50% interest in the company for $24 million. The company also has the option to eventually take over the business, acquiring the remaining 50% in five years.

It is not the first time Centuria has worked with the company, Jason Huljich, Centuria Joint CEO, said, “For the past three years we have partnered with Bass Capital across a number of lending opportunities and have confidence in the team’s abilities and its business model. Our investment in this platform is an opportunity to capitalise on strong demand from our high-net-worth investors for debt products, as they seek a diversified investment risk profile.”

Centuria also said the joint venture “will begin operating with a c.$270m committed loan book, more than $300m in pipeline opportunities and a $107m open-ended debt fund.”

The strategy is banking on financing demand from the non-banking financial sector to grow, with the current big four banks in Australia dominating the lending landscape (75%).

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