Mark Spring

Pallas Capital, leading APAC specialist financier and investment manager in Commercial Real Estate (CRE) debt, has been awarded an inaugural ‘Superior’ four-star rating by SQM Research for its managed Pallas Senior Income Fund.

The high investment grade rating reflects the Fund’s potential for outperformance over the medium-to-long term and highlights the exceptional calibre of its management team. Since its inception in May 2024, the Fund has exceeded its net target investor return benchmark on average by 109 basis points.

Commenting on the achievement, Mark Spring, Executive Director at Pallas Capital, said: “The Pallas Senior Income Fund earning a four-star rating within three months of its launch is a significant accomplishment. It stands as a testament to our product, credit and operation teams. We adopted a disciplined approach to fund design, carefully seeding the Fund with a portfolio of performing assets specifically for the advised-client segment. This rating assures licensed financial advisers and their wholesale clients that it is managed by a top-tier team and is well-positioned for strong performance.”

The ‘Superior’ rating from SQM Research is the result of a rigorous analysis of critical review elements, including business platform and systems, executive management, corporate governance, risk management, portfolio construction and fund performance and design. The comprehensive evaluation underscores the Fund’s robust management practices and high-quality portfolio of diversified and seasoned CRE credit assets.

Launched in May of this year, the actively managed Pallas Senior Income Fund offers monthly liquidity and asset-backed income with significant downside protection. It comprises diversified and seasoned commercial real estate first mortgage assets across Australia and New Zealand.

The Fund exceeded its net target investor return benchmark of 5.00% margin over the RBA cash rate, by an impressive 163 basis points return for the month June, providing for a total net investor return (after fees and costs but pre-tax) of 10.71% p.a. The portfolio demonstrates diversification across geography, borrower profile, sector, investment form, loan type and tenor.

Pallas Capital offers tailored investment solutions through single asset and diversified fund opportunities, as well as separate managed account strategies, for wholesale and institutional investors. These solutions span the capital stack and cater to investor preferences for liquidity, yield, or a combination of both:

Single Asset Investments

• Australian & NZ Commercial Real Estate Finance structured as:
  • Joint Ventures (JV) & Preferred Equity
  • Registered First Mortgages (investment, specialized assets, land acquisition, pre-development, or construction)
  • Second Mortgages (registered and unregistered)

Diversified Portfolios

• Unlisted Portfolios of Australian & NZ real estate debt or equity products, offering varying degrees of liquidity and/or income

The firm’s credit underwriting is supported by rigorous due diligence on each borrower and the underlying property, realistic and multi-faceted exit strategies and active management by the team throughout the loan term.

Pallas Capital and development-manager Fortis comprise Pallas Group, a business that provides specialist investment, lending, and development solutions in the boutique property market in Australia.

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As part of the role, Jason will be instrumental in driving operational improvement and growth in FUM of Pallas Capital’s growing suite of CRE debt products across Australia and New Zealand.

Prior to joining the Pallas Capital team, Jason spent 22 years in the real estate and structured finance sector, most recently as Owner and Managing Director of Quattro Finance & Advisory where he has originated approximately $2 billion in mortgages.

​“When the opportunity was presented to not only be a part of the growth of Pallas Capital, but to truly challenge the industry as a leader in the commercial real estate finance sector, it was an offer too good to pass on. The professionalism, experience and drive shown by the team, combined with the true care shown for all stakeholders in and around the business made this an easy decision for me” says Arnold.

​He adds, “I have known and worked with both Dan Gallen and Alexis Holloway for more than a decade and have worked closely with the broader Pallas Capital team on behalf of my own clients for the past three years. These relationships have enabled me to closely observe the capabilities and experience of the team in the commercial property and development finance market”.

​“We are excited to have Jason join the Pallas Capital team after working closely with him over the past decade and experiencing his talent and professionalism first-hand. It can be difficult to find senior personnel that align with the skill-set, culture and expertise that a company such as Pallas Capital requires as it continues to grow, and we are confident that Jason’s wealth of experience and personal drive will see an immediate impact on our business,” says Dan Gallen, Executive Director and Chief Investment Officer, Pallas Capital.

​Pallas Capital is one of the fastest growing non-bank lenders in Australia, offering brokers and developers lending solutions that are tailored to their needs. It offers borrowers five core loan types, being acquisition, pre-development, construction, residual stock and vacant land loans, along with the flexibility to negotiate LVRs and the required level of pre-sales for construction loans.

Pallas Capital manages funds for investing in commercial real estate loans secured against property assets with values between $1 – $50 million in major metropolitan areas. Wholesale investors are offered investment opportunities providing fixed or variable rate returns ranging from 7.7% p.a. in the Pallas Short Term Fund to 9% to 10% p.a. both rates inclusive of BBSW (first mortgages), 12.6% p.a. for the High Yield Fund inclusive of BBSW (First and Second Mortgages) and up to 18% p.a. for preference equity investments. Pallas Capital’s loans are supported by robust due diligence on each borrower and the security property, a realistic and multi-faceted exit strategy, and active management of all loans by the Pallas Capital team throughout the term.

​Pallas Capital and developer Fortis comprise Pallas Group, a business that provides specialist investment, lending and development solutions in the boutique property market in Australia.

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Dan Gallen

Leading Australian specialist property lender Pallas Capital has established a new lending vehicle with Credit Suisse, called Pallas NZ Funding Trust No. 1 (PFT NZ). PFT NZ is Pallas Capital’s first lending vehicle in New Zealand’s commercial real estate (CRE) debt market.

​PFT NZ has total funding of NZ$360 million approved by its funding partners, including Credit Suisse. Since its launch a few days ago, PFT NZ has funded six loans with a total value of NZ$29 million.

​PFT NZ intends to lend this money on a range of pre-development loans, residual stock loans and investment property loans. It expects that most of its loans will be between NZ$2 – 10 million in total, although it is able to make larger loans where its credit criteria are met. It will target medium sized CRE loan types and borrowers that lack liquidity as lending by both the banks and existing non-bank lenders tightens.

​PFT NZ is modelled on the successful Pallas Funding Trust No. 1 (PFT No. 1) launched in November 2021. PFT No. 1 is managed by Pallas Capital and majority funded by Credit Suisse and lends to medium sized SMEs in Australia.

​PFT No. 1 is the fastest growing fund managed by Pallas Capital, having now made a total of 72 loans with a total value of AU$320 million.

Dan Gallen, the Chief Investment Officer of Pallas Capital, commented that, “We are very excited to take our successful lending model into New Zealand, supported again by Credit Suisse. The CRE loans offered by our PFT vehicles provide crucial support to our SME borrowers at a time when loans from traditional banks, and other non-bank lenders, are harder to obtain and carry more onerous loan terms.”

He adds, “The market segment serviced by the PFT vehicles in Australia and New Zealand, whilst underserviced at present, generates substantial lending volumes given that most commercial properties have a value range of AU$1 – AU$15 million. This is precisely where PFT No. 1 and PFT NZ focus their lending businesses. We are confident that PFT NZ will emulate the success of PFT No. 1 as the lending team in our new Auckland office have long experience and deep relationships in the New Zealand CRE loan market.”

Mr. Gallen noted that, although other non-bank lenders compete with PFT, many of these lenders are funded by retail or high net worth investors. These investment flows have contracted quickly as market sentiment has softened in recent months, as it did in the first COVID 19 lockdown.

​Will Farrant, the head of Securitised Products for APAC at Credit Suisse, commented, “When it was launched last year PFT No 1 represented a new asset class for Credit Suisse in Australia. We looked for ways to expand how we can support Pallas Capital from the outset, and so are very pleased to now offer the same funding structure in New Zealand. We are confident of Pallas Capital’s future success and will continue to seek ways to do more with them going forward.”

​Although PFT will not undertake construction loans, these will continue to be offered through the existing Pallas Capital lending business that is currently settling about AU$50 million per month of new construction loans.

​Since its inception in December 2016, Pallas Capital has settled 331 loans and other funding structures with a total value exceeding AU$2.4 billion. With 150 loans having been repaid, it has a current loan book of AU$1.5 billion across 185 transactions.

​Pallas Capital and developer Fortis comprise Pallas Group, a business that provides specialist investment, lending and development solutions in the boutique property market in Australia.
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​Credit Suisse is an established warehouse provider and capital markets intermediary around the world. It has a track record of providing warehouse funding to loan originators servicing illiquid and under-serviced sectors of the Australian economy and developing capital markets funding for those asset types.

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Mark Spring

Pallas Capital has earned a superior 4-star rating for the Pallas Short Term Fund from SQM Research. The rating qualifies the fund as High Investment Grade suitable for inclusion on most advisors Approved Product Lists.

SQM Research conducted thorough due diligence on Pallas Capital’s investment team and processes, corporate governance, fund compliance and risk management to determine the rating. A 4-star rating recognises the fund’s potential to outperform over the medium-to-long term, with an attractive return to investors after fees of 6% p.a.

The rating by SQM Research is a reflection of Pallas Capital’s commitment to the highest level of due diligence in its origination and loan management processes, providing investors with a reliable return, despite market volatility such as that seen in the past 18 months.

“The Pallas Short Term Fund was launched only at the start of this year, and an SQM rating of 4-stars is testament to Pallas Capital’s rigorous due diligence with its origination and credit processes and risk management systems,” says Mark Spring, Executive Director, Pallas Capital.

He adds, “This rating gives wealth planners and investors the assurance that an investment in the Pallas Short Term Fund is in safe hands, simultaneously offering brokers and borrowers the confidence that our discretionary pools of capital are well managed and that we’re here for them for the long term.”

Introduced at the start of 2022, the Pallas Short Term Fund offers investors a 6% p.a. yield payable monthly in arrears and is invested only in registered first mortgages secured over real estate assets across Sydney, Melbourne and Brisbane with each loan having a maximum LVR of 65%.

Importantly, these loans are required to have a maximum term to maturity of eight months, currently averaging at just three months. CRE loans in the later stages of maturity can present a lower risk profile as construction or planning approvals are either complete or in the final stages of delivery. Matching the loan maturity profile with the six-month notice period required for redemptions allows for investor redemption requests to be met with a high degree of confidence. The Pallas Short Term Fund provides investors with an additional interest payment if redemption is delayed for any reason.

Pallas Capital is one of the fastest growing structured property investment arrangers in Australia, offering brokers and developers lending solutions that are tailored to their needs. It offers borrowers five core loan types, being acquisition, pre-development, construction, residual stock and vacant land loans, along with the flexibility to negotiate LVRs and the required level of pre-sales for construction loans.

Pallas Capital manages funds for investing in commercial real estate loans secured against non-specialised property assets with values between $1 – $50 million in major metropolitan areas. Wholesale investors are offered investment opportunities providing fixed or variable rate returns ranging from 6% p.a. in the Pallas Short Term Fund to 7% to 8% p.a. (first mortgages), 11% for the High Yield Fund (First and Second Mortgages) and up to 15% p.a. for preference equity investments. Pallas Capital’s loans are supported by robust due diligence on each borrower and the associated property, a realistic and multi-faceted exit strategy, and active management of all loans by the Pallas Capital team throughout the term.

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As part of their roles, Brad and Esther will be instrumental in servicing high net worth investors, family offices and institutional investors in Australia and the wider Asia Pacific region.

Prior to joining the Pallas Capital team in Sydney, Brad spent 30 years working in money markets across Sydney, Tokyo and Singapore, and most recently as Head of Rates of Tullett Prebon Australia. Brad has held several roles within the finance sector, including senior positions at BGC and the GFI Group.

​“I was introduced to the non-bank lending space by both Mark Spring and Craig Bannister, whom I’ve known for over 25 years, along with our Executive Chairman Patrick Keenan. Pallas Capital displays an exceptional level of professionalism and service towards its clients, making sure they have a seamless investment experience. The decision to join the team was an easy one for me,” says Brad Gowenlock, Partner – Distribution, Pallas Capital.

He adds, “I look forward to learning from the experts that surround me here in the distribution team, as well as our originations and credit teams. Their in-depth knowledge, and willingness to help is something I have been impressed with early on, and expect to work closely with them moving forward.”

​Esther Fang has extensive expertise working in fund management across Asia Pacific and an educational background in both finance and law. Based in Melbourne, Esther is fluent in both English and Mandarin, fully RG146 compliant with ASIC, a Certified FRM-Financial Risk Manager and a Level 3 Chartered Financial Analyst (CFA) candidate, having recently been awarded a CFA Women’s Scholarship.

“Pallas Capital has grown over the years to become one of the leading lenders in the industry, not just in Australia but also internationally. When the opportunity presented itself, I was excited to join the Pallas Capital team. In this role, I look forward to supporting Pallas Capital’s growth, especially by strengthening its ties with UHNW families in Asia who would be delighted to become valuable investors,” says Esther Fang, Partner – Distribution, Pallas Capital.

“With the non-bank lending space forecast to grow from $18 billion in 2020 to $56 billion in 2025 (CAGR of 25%), Pallas Capital is hiring across all aspects of the business to meet the rising demand that we are seeing in the marketplace. In the two-year period from January 2020 to the present day, Pallas Group’s headcount has grown by almost 300% to service this demand. Whilst we remain focused on building our HNW client business, this year will see a greater focus on growing our market share in the Wealth Planning and Institutional space,” says Mark Spring, Executive Director, Pallas Capital.

Pallas Capital is one of the fastest growing structured property investment arrangers in Australia, offering brokers and developers lending solutions that are tailored to their needs. It offers borrowers five core loan types that includes acquisition, construction, residual stock and vacant land loans, along with the flexibility to negotiate LVRs and level of pre-sales for construction loans.

​The business manages funds for loans secured against non-specialised property assets with values between $1 – $50 million in major metropolitan areas. Sophisticated investors are offered investment opportunities providing fixed rate returns ranging from 5.5% p.a. in the Pallas Short Term Fund to 6.75% p.a. (first mortgages) and to 13% p.a. (preference equity). Pallas Capital’s loans are supported by detailed due diligence on the borrower, a realistic and multi-faceted exit strategy, and active management of all loans by the Pallas Capital team throughout the term.

Pallas Capital and developer Fortis form part of Pallas Group, a business that provides specialist investment, lending and development solutions in the boutique property market in Australia.

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Steve Lawrence

Leading Australian specialist property lender Pallas Capital has deployed over $100 million in the summer months through the Pallas Funding Trust (PFT).

PFT was deployed on a diverse mix of loan types to completed residential projects, future development sites and investment properties across locations in Sydney, Melbourne, Adelaide and Brisbane. Some of these loans included an industrial property in Western Sydney, a recently completed apartment project in central Adelaide and a portfolio of residential investment properties in New South Wales.

“PFT has been seeded with a portfolio of high-quality loans in the three months since Pallas Capital commenced the program. Our broker and borrower clients see Pallas as an attractive alternative to the banks, given PFT’s competitive interest rates, flexible leverage options and market-leading service proposition,” says Steve Lawrence, Executive Director of Lending, Pallas Capital.

He adds, “Our brokers have full confidence that Pallas Capital delivers in a lending environment that is fraught with over promising and under delivery. All of these factors will see demand for PFT and the suite of Pallas Capital products continue strongly with 2022 predicted to be a record year for lending volumes.”

The record performance over the summer quarter demonstrates robust appetite in the market for the loan types that PFT specialises in. Pallas Capital expects this demand to accelerate, through its strong relationships with brokers and borrowers that specialise in the mid-market CRE space. While all PFT loans are secured by a registered first mortgage, Pallas Capital will also look to provide additional funding through its other products, such as the Pallas High Yield Fund that makes second mortgage loans. Pallas Capital’s comprehensive lending strategy will give qualifying borrowers access to additional flexibility on their debt structuring.

PFT is a lending vehicle that was established by Pallas Capital in November 2021. It had a total funding of $530 million approved by its funding partners, Pallas Group and Credit Suisse. PFT lends money on a range of pre-development loans, residual stock loans and investment property loans, with loan sizes ranging from $1 – $15 million. PFT specifically caters to medium-sized CRE borrowers who are under-serviced by the major banks.

Pallas Capital is one of the fastest growing structured property investment arrangers in Australia, offering brokers and developers lending solutions that are tailored to their needs. It offers borrowers five core loan types that includes acquisition, construction, residual stock and vacant land loans, along with the flexibility to negotiate LVRs and level of pre-sales for construction loans.

The business manages funds for loans secured against non-specialised property assets with values between $1 – $50 million in major metropolitan areas. Sophisticated investors are offered investment opportunities providing fixed rate returns ranging from 5.5% p.a. in the Pallas Short Term Fund to 6.75% p.a. (first mortgages) and to 15% p.a. (preference equity). Pallas Capital’s loans are supported by detailed due diligence on the borrower, a realistic and multi-faceted exit strategy, and active management of all loans by the Pallas Capital team throughout the term.

Pallas Capital and developer Fortis form part of Pallas Group, a business that provides specialist investment, lending and development solutions in the boutique property market in Australia.

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SQM Research considered Pallas Capital’s investment team and processes, corporate governance, fund compliance and risk management to determine the rating. A 4-star rating recognises the fund’s potential to outperform over the medium-to-long term, with an attractive return to investors after fees of 7% p.a.

The rating by SQM Research is a reflection of Pallas Capital’s commitment to the highest level of due diligence in its origination and loan management processes, ​​providing investors with strong, secure and consistent yield, despite market volatility such as that seen in the past 18 months.
“An inaugural SQM rating of 4-stars is outstanding – it is testament to Pallas Capital’s rigorous due diligence with its origination process and continuous risk management systems,” says Mark Spring, Executive Director, Pallas Capital.

He adds, “This rating gives wealth planners and investors the assurance that their investment is in safe hands and will continue to provide strong risk adjusted returns. At the same time, it also gives brokers and borrowers the confidence that our discretionary pools of capital are well managed and that we’re here for them for the long term.”

Pallas Capital is one of the fastest growing structured property investment arrangers in Australia, offering wholesale and sophisticated investors investment opportunities backed by commercial real estate providing fixed rate returns from 5.5% p.a (short term investment in first mortgages) to 6.75% p.a. (‘life of loan’ first mortgages) to over 15% p.a. (preference equity).

The business provides funds for loans secured against non-specialised property assets – chiefly premium, city-fringe assets with values between $2 – $50 million in Sydney, Brisbane and Melbourne. Its loans are supported by detailed due diligence on the borrower, a realistic and multi-faceted exit strategy, and active management of all loans by the Pallas Capital team throughout the term.

Pallas Capital and developer Fortis form part of Pallas Group, a business that provides specialist investment, lending and development solutions in the boutique property market in Australia.

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As part of the role, Alexis will be instrumental in the structuring and approval process for all commercial real estate loans. He will also be responsible for establishing credit policy and form part of the investment committee at Pallas Capital.

Established in 2016, Pallas Capital is one of the fastest growing structured property investment arrangers in Australia, having underwritten over $850 million of transactions to date. This number is expected to steadily increase over the next six months, with Pallas Capital doubling its staff since the start of 2021 to accommodate its strong growth in the non-bank lending space.

Prior to joining the Pallas Capital team, Alexis spent 13 years in the real estate and structured finance sector, most recently as a Senior Credit Manager at Balmain Group.  Alexis has held several roles within the real estate non-bank lending sector including credit manager, loan recovery and work outs and joint venture structuring, having also worked at CVS Lane Capital Partners and Deloitte.

“I have admired from afar the business Dan and the leadership team have created at Pallas Capital. The company has experienced tremendous growth over the past five years and amassed a team of talented and experienced real estate financiers. I hope to contribute to its continued growth,” says Alexis Holloway, Senior Credit Manager, Pallas Capital.

He adds, “The common goal at Pallas Capital is to become the preeminent leader in the Australian CRE debt sector. If we continue to bring our years of experience, innovation and thoughtful funding solutions to our borrower clients, then the common goal becomes very attainable.”

“In a market that is dominated by major banks and institutions, often it can be difficult to find senior credit personnel that perfectly match the skill set and expertise that a company needs as it continues to grow. We are extremely fortunate to have Alexis join the Pallas Capital team, bringing with him a wealth of experience that he has acquired  over the years through his work in corporate advisory, non-bank credit and funding roles,” says Dan Gallen, Chief Investment Officer, Pallas Group.

He adds, “As Pallas Capital expands its FUM to further attract discretionary capital, we are confident that Alexis’ addition to the team will provide valuable, enhanced oversight over the Pallas Capital loan portfolio as it continues to witness exponential growth.”

Pallas Capital provides funds for loans secured against non-specialised property assets – chiefly premium, city-fringe assets with values between $5 – $40 million in Sydney, Brisbane and Melbourne. Its loans are supported by detailed due diligence on the borrower, a realistic and multi-faceted exit strategy, and active management of all loans by the Pallas Capital team throughout the term.

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Steve will lead Pallas Capital’s growing lending team as the business continues its trajectory of rapid growth, bringing its expanding portfolio of flexible lending products to brokers and borrowers around Australia.

Since its inception five years ago, Pallas Capital has enjoyed rapid growth – having underwritten over A$750 million of transactions to date. With Steve’s appointment, this number will climb sharply over the next 6-12 months.

Steve joins Pallas Capital from La Trobe Financial where he most recently served as Chief Lending Officer Commercial. Steve said that his focus at Pallas Capital will be to expand the loan book at a rapid rate, bringing high-quality service, great speed-to-market, and flexibility in assessing and delivering loans to the growing client base.

“I have been in the banking, finance and property industries in Australia for almost 40 years, and I know that relationships are at the heart of success in this business, and therefore in everything that I do.”

“Patrick Keenan and Dan Gallen have a very compelling, ambitious and well-supported vision for Pallas Capital’s business, and it was an easy decision for me to become part of the team working to achieve this vision.”

“I look forward to continuing to build on my strong relationships in the Australian lending industry to drive positive outcomes for brokers and borrowers looking to take advantage of one of the most competitive real-estate loan product ranges in the Australian market, supported by Pallas Capital’s robust lending strategy,” Mr. Lawrence said.

Dan Gallen, Chief Investment Officer of the Pallas Group, said Steve’s appointment enables Pallas Capital to expand its support of the thriving property sector in Australia.

“Steve brings deep experience, trust and industry-leading relationships to Pallas Capital’s business, and we are thrilled to have him onboard. We knew that we needed the right person to lead Pallas Capital’s lending team, and Steve’s reputation in the industry was one we could not look past.”

“At Pallas Capital, we are committed to assisting those who are under-served in the current market. The construction market in Sydney, Brisbane and Melbourne continues to grow at a fast rate, and Pallas Capital will continue to support the booming property sector in Australia through our diversified funding strategy. The certainty our lending clients have in our service and product is what drives our customer loyalty and steadily growing loan book, and I know that with Steve at the helm, the quality of our client relationships will only continue to grow,” Mr. Gallen said.

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