Cheyne Capital is planning to raise £7.5bn (€8.6bn) for two European real estate debt funds to capitalise on high interest rates and a retreat from bank lenders.

The global alternative investment manager, through its Cheyne Real Estate Credit Holdings (CRECH) programme, is seeking to raise £5bn for its eighth Senior Loan strategy and a £2.5bn hard cap for its ninth Capital Solutions strategy to target senior lending and recapitalisation investments.

The Senior Loan strategy will focus only on making senior loans across core, core-plus, value-add and development assets in the UK and Western Europe. The Capital Solutions strategy, which has so far secured £650m capital commitments, will also make senior loans and provide comprehensive solutions across the capital stack, including subordinated debt, hybrid credit and commercial mortgage-backed securities.

Retrenchment by banks at a time of rising lending costs is expected to open up opportunities for non-bank lenders such as debt funds.

Ravi Stickney, managing partner and CIO of Cheyne Real Estate, said: “The end of the zero-interest-rate environment brings a much-needed readjustment in asset values and the move to long-term necessary, productive assets and away from obsolete assets held up by low-interest rates. We believe that this transition will take place over the next five years.

“At the end of this period, the owners of thematic assets, providing for structural long-term needs, and with the highest environmental and social credentials, will thrive. This transition, however, will demand substantial capital and innovative, complex solutions. With a substantial localised presence, track record and deep bench of knowledge, Cheyne Real Estate is well placed to offer those solutions to the best-in-class counterparties in the UK and Europe.”

Stuart Fiertz, co-founder and president of Cheyne Capital, said: “We believe that Cheyne is one of the few European-based real estate debt managers with a long and consistent track record and a large team with experience across all aspects necessary to be a successful real estate debt manager.

“This, combined with local presence via a network of offices across Europe, has enabled us to build deep and trusting relationships with our borrowers and an enormous pipeline of loans which we look forward to funding through the next iterations of the CRECH programme.”

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