Cheyne Capital has raised about £500m (€544m) for its latest real estate debt fund, as it seeks to capitalise on dislocation in the European lending markets, according to a source close to the matter.
The alternative asset manager has already made four senior loans worth £232m in aggregate and IPE Real Assets understands it hopes to eventually raise close to £1.5bn from investors.
Cheyne Capital recently announced the completion of four loans backed against residential, co-living, office and student accommodation assets in Europe.
It also said it had a pipeline of transactions worth £800m for the fourth quarter of 2020 alone.
The level of fundraising and capital deployment contrast with suggestions that real estate lenders are pulling back from the market amid COVID-19 disruption.
Last week, The Business School (formerly Cass), which produces a biannual survey into the state of the UK commercial property debt market, reported on a sharp fall in lending activity in the first six months of the year.
Its latest report found that some lenders are only considering business with existing borrowers and most are avoiding retail assets completely. The authors warned of a £23bn glut of assets that need refinancing over the next two years.
Cheyne Capital has argued that the withdrawal of banks and a lack of governmental support for European property lending is creating “a large pipeline of opportunities for both senior loans at defensive loan-to-values and also recapitalisation finance for borrowers in need of capital to address pressures from incumbent lenders”.
Ravi Stickney, managing partner and CIO at Cheyne Capital, said: “COVID-19 has accelerated a multitude of irreversible trends in the way we live and work and there will be a long-term shift in the way real estate assets are used and valued.
“The nimble sponsors we work with are quickly adapting their strategies with transaction demand increasing significantly in the last few months.
“Whilst the investment case for real estate in the post-2020 world is strong, unfortunately, COVID-19 has significantly impaired the availability of sophisticated, innovative capital to fund these much-needed investments.”
Earlier this week, IPE Real Assets reported that Invesco Real Estate had taken over the European real estate debt business of GAM Investments.
Andy Rofe, managing director for Europe at Invesco Real Estate, said “dislocation in the market” and a renewed “pullback from traditional lenders” would create opportunities.
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