Aviva Investors’ real estate multi-manager is among investors in TIAA Henderson Real Estate’s debut property debt fund.
TIAA Henderson said it has raised £138m (€192m) for its UK Enhanced Debt Fund, also attracting investment from US parent TIAA-CREF.
It is the first debt fund launched by TIAA Henderson since the fund management joint venture between Henderson Global Investors and TIAA-CREF was created in 2013.
TIAA Henderson has already begun investing in UK real estate debt on behalf of the fund and TIAA-CREF, the Teachers Insurance and Annuity Association – College Retirement Equities Fund. Earlier this year, it completed financing deals worth more than £200m.
The new fund has been launched amid an increasingly competitive market for real estate debt funds in the UK. Eudes Berthelot, fund manager at Aviva Investors Global Indirect Real Estate, said the fund’s “positioning strongly differentiates it from alternative debt offerings and strategies currently available in the market”.
TIAA Henderson’s real estate debt platform is being led by Christian Janssen, formerly of Renshaw Bay and Barclays Capital. Henderson Global Investors sought to launch a real estate debt fund prior to the joint venture with TIAA-CREF, hiring John Feeney – now at Lloyds Banking Group – in 2012.
The new fund will invest in whole loans and mezzanine debt up to 75% loan-to-value over a six-year period.
TIAA Henderson said It will focus on prime and “strong” secondary assets, and “well-positioned regional assets in the core-plus and value-added sectors of the UK market”.
The fund is able to syndicate senior portions of whole loans.
Christoph Wagner, director of debt strategies at TIAA Henderson, said: “Structural changes in the lending market have created the opportunity for alternative lenders to originate commercial real estate debt investments at attractive risk-adjusted returns.
“Meanwhile, a weak supply of efficient debt finance is continuing for certain parts of the UK market. As a result, we believe that commercial real estate debt can offer investors stable, income-focused returns with significant insulation from volatility in the wider property and investment markets.”
