Norwegian municipal pensions provider KLP and Swedish pensions and insurance firm Folksam, along with several other large Nordic institutional investors, have invested in Brunswick Real Estate’s second debt fund.
The investment manager said Brunswick Real Estate Capital II, has raised SEK6.6bn (€636m) by its final close and was the biggest Nordic fund so far to focus on real estate senior debt.
Sweden’s PRI Pensionsgaranti is also among the investors.
Michael Kjeller, CIO of Folksam Group, said: “Investing in long-term senior debt is a good alternative to our fixed income portfolio, especially with the current low yield environment and uncertainty in the market.”
As a pension savings company with an infinite perspective, Kjeller said Folksam found the risk-reward was attractive, and that as its investment manager, Brunswick Real Estate, provided the sought after exposure and efficient management.
Brunswick Real Estate Capital II is an unlevered closed-ended real estate debt fund, involving senior secured lending in Sweden, with loans mainly between SEK400m to SEK1bn per loan, with a term of up to ten years.
Louise Richnau, chief executive and partner of Brunswick Real Estate Capital, Brunswick’s credit arm, said that even though there was a lot of demand for Nordic real estate, and Sweden was consistently one of the most liquid real estate markets in Europe, the availability of financing to borrowers had historically been volatile.
“Real estate is an asset class with a long investment horizon which requires long-term capital on the equity as well as on the debt side, which unlevered institutional capital can offer,” she said.