AXA Investment Managers - Real Assets said on Wednesday that it has closed its 10th commercial real estate senior debt fund, CRE Senior 10, having achieved its capped target of €1.5 bn.
The fund, which has already invested a total of €400 mln, or 25%, takes AXA IM - Real Assets’ total debt commitments to over €14 bn.
CRE Senior 10 is AXA IM - Real Assets’ first debt fund to have an initial mandate in US loans, with an allocation of up to 25% to capitalise on the growing US economy. AXA IMRA has invested in the US real estate debt space since 2014 on behalf of its separate mandates and as part of its wider expansion into the US market.
Commitments for the fund have been received from 19 institutional investors, spread across various European countries, 84% of whom have invested previously in AXA IM - Real Assets’ real estate debt platform, as well as four new clients.
'Reaching our 10th debt fund is a milestone achievement and shows the scale of our business together with the commitment of our clients. The fact that we have already deployed over 25% demonstrates our ability to continue to deliver on our plans. It also reinforces our strategy of capping our fund raise to ensure our clients’ funds are not sitting idle but are deployed as rapidly and prudently as possible,' commented Timothé Rauly, head of Funds Group at AXA IM - Real Assets.
Alternative asset classes
AXA IMRA’s latest fund will target senior debt opportunities in the office, retail, logistics, light industrial and some alternative asset class sectors, such as healthcare, according to Rauly. Its annual target return is 200 basis points (bps) over the 3-month Libor rate.
Although AXA IMRA has up to three years to deploy the capital for its latest fund, it is hoping to fully invest it within the next 18 to 24 months.
The decision was taken to add the US into the mix to reflect the fact that investors are looking for appropriate risk return investments, according to Rauly. 'We've been extremely selective and adding the US was a way to ensure that we would be able to offer strong returns in the long term to our investors.'
Commercial Real Estate Senior 10 will primarily target European markets such as Germany, France and the UK, although the fund's remit allows the group to invest anywhere in Europe, including Southern Europe and Scandinavia.
'For us, the most important thing is to look at the relative-value perspective when it comes to identifying lending opportunities and to be flexible. Our minimum loan size is typically around €50 mln. The largest loan we have underwritten so far was for €400 mln. However, we will also consider club deals,' Rauly told PropertyEU earlier this year.
