Alternative investment manager Cheyne Capital has announced plans to raise £7.5 bn (€8.6 bn) for real estate lending.
The firm is preparing the next iterations of its Cheyne Real Estate Credit Holdings (CRECH) programme to help fulfil UK and European borrower demand for funding solutions.
Cheyne said further demand was arising due to the higher interest rate environment and banks retreating further from real estate lending.
The areas in which Cheyne believes new debt funding solutions will be most needed are senior lending and recapitalisations, with the firm’s senior loan and capital solutions strategies focused on these two opportunities.
The senior loan strategy will focus only on making senior real estate loans across core, core+, value-add and development assets located in the UK and Western Europe.
This will be the eighth launch in the CRECH programme and will target a capital raise of £5 bn.
The capital solutions strategy will also make senior loans and, in addition, will also provide comprehensive solutions across the capital stack, including subordinated debt, hybrid credit and commercial mortgage-backed securities (CMBS). This strategy already has a £650 mln investor commitment and will be the ninth launch in the CRECH programme with a hard cap of £2.5 bn.
Ravi Stickney, managing partner and CIO of Cheyne Real Estate, said: 'The end of the zero interest rate environment brings a much-needed re-adjustment in asset values and the move to long-term necessary, productive assets and away from obsolete assets held up by low interest rates.
'We believe that this transition will take place over the next five years. At the end of this period, the owners of thematic assets, providing for structural long-term needs, and with the highest environmental and social credentials, will thrive. This transition, however, will demand substantial capital and innovative, complex solutions.
'With a substantial localised presence, track record and deep bench of knowledge, Cheyne Real Estate is well placed to offer those solutions to the best-in-class counterparties in the UK and Europe.'
The sector that Cheyne has chosen to support most significantly in recent years, and in which it maintains the highest conviction, is the living sector. The firm also favours the onshore industrial and technology-led sectors.
In the office space, the firm will only support properties with the strongest environmental credentials and a focus on employee well-being.
Some of the firm’s recent deals include the structuring of a £780 mln loan alongside JP Morgan to Quintain for the refinancing of Wembley Park; £318 mln to Goldman Sachs-backed Riverstone for two later living developments in London, £229 mln to Stanhope Plc for the transformation and extension of the iconic 76 Southbank in London into an exemplar low carbon office, and over €200 mln to the Beaumier hotel group with lifestyle hotels across France, Switzerland and Spain.
Cheyne Real Estate made £2.8 bn of European loans in 2022 and is on track to exceed £3 bn in 2023. I
Stuart Fiertz, co-founder and president of Cheyne Capital, said: 'We believe that Cheyne is one of the few European-based real estate debt managers with a long and consistent track record and a large team with experience across all aspects necessary to be a successful real estate debt manager.
'This, combined with local presence via a network of offices across Europe, has enabled us to build deep and trusting relationships with our borrowers and an enormous pipeline of loans which we look forward to funding through the next iterations of the CRECH programme.'
