A record quarter for Madigan

Madigan Capital has had a busy start to the year having issued six new loans into the Australian real estate debt market on behalf of its clients.

Marking a record for the company over the last quarter, Madigan Capital has issued six new loans representing c$300m of institutional debt capital across four sectors.

New loans have been written across the industrial, office, hotel and residential sectors in Sydney, Melbourne and Adelaide, while the repaid loans were issued into the Melbourne south-east industrial and city fringe office markets.

The new loans provide a mixture of acquisition, stabilised and construction funding to Madigan’s borrower clients, enabling them to optimise the capital position of their investments, with a flexible lending partner.

Each of the new loans has been funded by the Madigan Active Debt Fund I, an open-ended unlisted $900m institutional investment fund.

CEO of Madigan Capital, Michael Wood, is passionate about providing institutional investors a platform to invest in credit instruments secured by real estate and social infrastructure assets in Australia.

“This is a healthy start to the year and our strong track record is testament to our ability to carefully navigate the fluctuations of the market. We’re mindful of the responsibility connected to managing the capital of institutional investors and focus on securing investments that align with sound values and deliver sustainable long-term returns for our partners.”
Prior to launching Madigan Capital in 2016, Michael was the founding partner of a global real estate investment management firm based in Atlanta, USA, where he developed expertise in real estate backed debt investment. He helped pioneer the non-bank lending space in the late 90s anticipating the exponential growth in the sector.

In Australia, Michael and his team of senior personnel that average 26 years of experience through multiple investment cycles, are focused on tailoring bespoke terms to suit every client’s needs. Every day, the Madigan Capital team actively optimise and manage over $1B in funds, underpinned with decades of real estate, credit and structuring experience.
Madigan differentiates itself in the Australian private real estate debt market with its ground-up real estate expertise, and hands-on knowledge of managing loan books through market peaks and troughs.

Understanding what can go wrong is critically important when underwriting and structuring loans from the outset. The teams’ experience stretches well beyond the 14 year tail wind the sector has enjoyed since the Global Financial Crisis, a period during which most other non-bank lenders have emerged.

“In Australia, the real estate debt market is yet to mature, however it is being increasingly seen as a worthwhile asset class in its own right given it is relatively high yield, supported by physical assets, and strong covenant packages. But we are very conscious of moving from current peak asset pricing into a rising interest rate environment, and the impact that can have on certain sectors and asset values.

At Madigan, we have all worked through periods of asset price deflation, and are well aware of the consequences of not appropriately underwriting and structuring loans from the beginning, and of being prepared to work with your borrower through times of difficulty.

“We believe it is a moment in the cycle to be generally investing further down the risk curve, than continuing to chase ‘risk-on’ returns that have been largely fuelled by extraneous factors such as a global regime of quantitative easing, that now looks to be firmly over.”

“Madigan, playing mostly in the mid-risk segment of the lending market between the banks and most other non-bank lenders, is looking forward to continuing to deliver strong risk-adjusted returns to our investors, and being a reliable lender to our borrowers.”