UK pension funds have backed DRC Capital’s first UK real estate whole loan fund to raise £700m (€788.4m) at final close.

The commercial property debt investment adviser said DRC UK Whole Loan Fund, which set out to raise £500m, has now reached its hard cap target.

DRC Capital said the fund held its first close in December 2017 and received approved capital commitments totalling £700m in under 10 months.

DRC UK Whole Loan Fund raised fully discretionary capital from an investor base consisting primarily of public and private pension schemes based in the UK, it said.

The fund deploys capital across all major commercial real estate asset classes, focussing on value-add properties which create income and de-risk investments through proactive asset management by experienced real estate borrowers.

DRC Capital said it expects to deploy a significant portion of the fund’s capital by end of 2018, adding that it believes it will be able to maintain this current deployment pace well into next year.

Dale Lattanzio, Managing Partner for DRC Capital said; “We are delighted to work with our investors to provide the attractive risk-adjusted returns available in the UK real estate debt market and are very pleased with the Fund’s investment progress.

“This is the first in what will become a series of Whole Loan focussed products in the DRC range of investment programs and is our seventh overall debt investment vehicle.”

Savills Investment Management owns an initial 25% stake in DRC Capital with an option to buy the remaining 75% in 2021.

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