EUROPE - AXA Real Estate Investment Managers has secured €1.5bn in insurance company capital to provide European real estate financing.
The investment manager has raised €350m for its new pan-European debt fund and has a further €1.15bn in existing commitments from insurance companies to invest in the real estate debt space.
It is the latest indication that insurance companies will move back significantly into the real estate lending space as banks retreat from their previously aggressive financing activities.
AXA Real Estate has already invested €1bn in real estate debt, predominantly in 2009 and 2010, but the latest round of capital raising suggests it will continue to focus on increasing its activity.
The fund manager announced the first close of its new fund Commercial Real Estate Senior 1 (CRE1), having secured capital commitments from a mix of European insurance companies and AXA Group companies. AXA Real Estate intends to raise as much as €1bn for the fund eventually.
CRE1 will provide senior loans either directly or acting as a syndicate behind a bank, focusing on investments backed by good-quality income-producing properties.
The fund will primarily target euro-denominated investments, but will also seek exposure to sterling and Nordic currencies.
CRE1 fund will seek returns at levels significantly above those of more traditional credit products, but with an attractive risk premium.
AXA Real Estate will also leverage its large real estate platform and consider investing across the whole capital structure - from senior loans to equity, including mezzanine debt, preferred equity and distressed debt structures - on a case-by-case basis.
Pierre Vaquier, chief executive at AXA Real Estate, said: "CRE1 is a perfect example of how we are able to work with our clients to produce investment products that meet their specific requirements.
"A key selling point for our clients in this instance is our ability to assess risk and our inherent understanding of the real estate assets that underpin debt investment, as well as our proven expertise in this field."