BMO Real Estate Partners has joined a growing number of managers of pan-European residential funds, holding a first close for its debut vehicle.

The company hopes to raises €800m for BMO Residential Europe Fund but did not disclose how much it raised so far.

The Fund, categorised as article 8 product under the new EU Sustainable Finance Disclosure Regulation (SFDR), will invest across the premium, mid-market and affordable residential sectors, including senior living.

BMO REP is promoting the delivery of sustainable rental homes that are “carbon aware and community orientated”, and will target a distribution yield of up to 4%.

Alexander Ernst, who joined BMO REP in Germany as director of fund management earlier this year, will manage the fund.

Iris Schöberl, managing director and head of institutional clients at BMO Real Estate Partners Germany, said: “We continue to witness population growth across European metropolitan regions and major cities. With this growth comes increased demand for affordable, sustainable housing, especially in urban locations.

“Using our expertise in this area we believe we are able to create a portfolio of properties to generate both stable returns for clients as well as meet ESG standards.”