EUROPE – Pramerica Real Estate Investors has raised €820m of equity for its latest real estate debt fund, increasing the size of its European debt platform to more than €2bn.
The PRECap IV fund, which will aim to generate returns of 13-17% by investing in junior debt secured against European property, has attracted capital from institutional investors from Europe, North America and the Middle East.
APG, the largest pension fund asset manager in the Netherlands, has provided some of the equity, having invested in previous debt funds managed by Pramerica, including PRECap III.
In April, Pramerica announced it raised €260m for PRECap III, an amount that could be doubled "once the initial tranche [is] successfully invested".
Today, Pramerica revealed it raised the full €520m for PRECap III and completed 30 debt investments worth approximately €1bn since 2010.
Andrew Radkiewicz, co-head of Europe at Pramerica, said the latest capital raising showed "the level of investor interest due to strong risk-adjusted returns".
Earlier this year, Robert-Jan Foortse, head of European property investments at APG, told IP Real Estate the market opportunity would last longer than originally anticipated.
He also said APG identified real estate debt investments as an alternative means of gaining access to good-quality property assets unavailable to equity investors.
PRECap IV will focus on office, retail, industrial and residential properties in the UK and Germany, with deals ranging in size from €10m to €100m.
Pramerica said: "There remains a significant opportunity for providers of junior debt for the acquisition or refinancing of assets with good underlying property fundamentals, but for which traditional senior and other lenders are unable or unwilling to provide full financing."