A new open-ended senior debt fund created by Qualitas has raised over 20% of its initial AUD500m (€316.7m) target and the manager also expects to launch a second AUD300m opportunity real estate fund.
Qualitas Senior Debt Fund has raised more than AUD100m at first close, the Melbourne-based nonbank real estate lender said as it targets to raise at least AUD500m by next year.
Andrew Schwartz, Qualitas group managing director, told IPE Real Assets: “We’ve already committed all of the capital raised in our first close to a number of quality assets.”
He added that the fund has good access to a pipeline of quality deals.
“There is a growing need for alternative financiers who can lend outside of the big banks’ increasingly narrow parameters. As banks have continued to limit their credit appetite, the opportunity for capital providers such as Qualitas has grown substantially,”
Schwartz said: “The risk and return profile of the Senior Debt Fund is attractive to private and institutional investors seeking real estate that has low correlation to equities including REITS, in a global environment of high asset valuations.”
The Senior Debt Fund makes monthly distributions and targets a return of 400-600 basis points above the three-month official bank bill rate.
Qualitas has committed equity totalling AUD2bn to real estate, of which 80% is in debt.
Across its funds, said Schwartz Qualitas has seen particular interest from offshore institutions, attracted to Australia’s market dynamics.
“Real estate debt is an established institutional asset class in other countries, but there’s a lot of capital looking for a home in those markets, and this competition has pushed down risk-adjusted returns.
”In Australia, risk is lower and returns are higher for comparable investments, so we have fielded a lot of interest from global investors.”
In coming weeks Qualitas aims to launch its second opportunity real estate fund with a hard cap of at least AUD300m.
Schwartz told IPE Real Assets that the AUD300m Qualitas Opportunity Fund I is now fully allocated.