(Bloomberg) — Principal Financial Group Inc., the provider of life insurance and retirement products, is joining with Macquarie Group Ltd. in a venture that will make loans and package them into bonds.
The real estate arm of Principal Financial will underwrite, close and service the loans while Sydney-based Macquarie will provide funding, the companies said in a statement today.
Australia’s largest investment bank is pushing into commercial mortgage-backed securities (CMBS) market that is rebounding after shutting in 2008. Wall Street banks this year have arranged about $54.6 billion of U.S. CMBS tied to everything from strip malls to skyscrapers after issuance doubled to $80 billion in 2013. Macquarie this year hired Tim Gallagher, who had led Morgan Stanley’s commercial-real estate debt syndicate, to expand in the U.S.
The venture will help the insurer “offer a wider menu of options for our borrowers and leverage the strengths of both firms,” Margie Custis, a managing director for Des Moines, Iowa-based Principal’s real estate arm, said in the statement.