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- Starwood European Real Estate Finance announces buyback programme
Starwood European Real Estate Finance (SWEF) has announced that it has appointed Jefferies International Limited to administer its share buyback programme. Details are as follows:
Starwood European Real Estate Finance is a Guernsey domiciled closed-end investment company that will originate, execute and service a diversified portfolio of commercial real estate debt investments in liquid markets (office, retail, logistics, light industrial, hospitality and residential) in the UK and Continental Europe.
[QD Comment: certain real estate sectors have been under pressure, as have the debt funds that lend to them (see our recent commentary on the travails of UK mortgages. which has found itself in the sights of M&G Investment Management) and SWEF finds itself at a marked discount to NAV. Given the nature of the relationships that lenders have with their borrowers, it seems reasonable that SWEF’s board and management could regularly find themselves in the position of material information that would effectively put them inside on SWEF’s stock and unable to authorise repurchase transactions. This approach is an elegant solution to the problem as it explicitly removes the board and manager by making repurchase them entirely independent of them. In the absence of such a mechanism, SWEF could find itself trade at a significant discount to NAV, for a prolonged period, before the board could intervene. By outsourcing the repurchase decision to Jeffries, the uncertainty around the ability to repurchase is removed, which is ultimately good for shareholders.]
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