Fiera Real Estate UK has secured £100m (€113m) seed capital for a newly launched open-ended pan-European real estate debt fund.

The manager said it has created the European Debt Fund to invest in senior-secured, investment-grade real estate loans.

The fund – which will initially focus on the UK market before expanding to select continental European markets – will be investing across multiple sectors such as residential, logistics, grade-A offices, leisure assets and hotels. 

The fund, categorised as an Article 8 product under the new EU Sustainable Finance Disclosure Regulation, is targeting a 10%-plus net internal rate of return, Fiera Real Estate said.

The manager said the £100m seed capital secured is in addition to £200m of commitments targeting higher yield UK opportunities across Fiera Real Estate’s debt platform.

Charles Allen, head of European real estate at Fiera Real Estate, said: “Private credit is an important addition to an institutional portfolio and the launch of our fund is a natural next step in the development of our product offering.

“With a team of recognised experts and excellent market coverage, we are well positioned to offer our clients strong risk-adjusted returns across Europe at a very compelling time in the market cycle”.

David Renshaw, co-head and debt strategies MD at Fiera Real Estate, said: “The opportunity set within private real estate credit was already a compelling one, but rising interest rates coupled with mainstream lenders having to deal with heritage loan books and reducing credit supply means that the timing of our fund launch is opportune.

“We believe that private real estate credit will continue to grow and play an increasingly important role for both borrowers and investors within the European real estate landscape over the coming years and the launch of our fund is a testament to that belief.”

To read the latest edition of the latest IPE Real Assets magazine click here.