...Structural Funding Changes Underway: New regulations are changing the funding markets for long-term real assets, which include commercial real estate (CRE), infrastructure and project finance debt. These have led to a shift in the banking sector's risk appetite to act as `buy and hold' lenders for these and many other types of assets. Regulation Drives Disintermediation: Basel III does not come into full effect until 2019, yet its market impact already is being felt. Fitch Ratings is seeing an increasing number of funds and other non-bank vehicles being used to attract institutional capital to fund CRE, infrastructure, and other long-term, real assets. Funding Gap Exists: There is a EUR36bn funding gap for long-term, real assets in Europe in 2014-15, according to DTZ, This is largely due to a pullback by banks and the only gradual return of CMBS. Funds Typically Closed-End: Closed-end funds, rather than those that are open-ended and offering regular investor redemptions, seem to be the...
