Edmond de Rothschild Real Estate Investment Management (REIM) has raised an initial €250 mln for its European real estate debt strategy, focused on providing whole and mezzanine loans as well as preferred equity to investors in the major European markets.
The new market entrant has raised the equity from a mix of international investors for two debt vehicles, the Edmond de Rothschild European Real Estate Debt Fund and a dedicated fund with a German insurance group.
The Real Estate Debt Fund, which is targeting to deliver an income distribution of 4%-5% a year and a net total return of approximately 8%, has so far attracted €70 mln towards a target size of €300 mln, while the separate account represents a mandate of €180 mln.
In a statement, the company said the two debt vehicles had complementary risk-return profiles and may co-invest in the same loan transactions with target loan-to-value ratios of 70% - 80% on average, potentially more on individual deals.
The lending strategies focus on all major and alternative property sectors in the European real estate markets, including Germany, France, Benelux, Nordics, Spain, Italy and the UK.
Ralf Kind, head of real estate debt, told PropertyEU the platform was seeking a mix of debt investments in both stable, long income properties as well as value add situations containing a little more risk.
The company expects to hold a further close of around €100 mln for its comingled fund in March, another in the summer, and the final close targeting €300 mln by the end of the year or early in 2022.
Christophe Caspar, global head of asset management at Edmond de Rothschild Group, said: ‘We are now in a lenders’ market. The case for private real estate debt has become even stronger given the huge lending opportunities at lower risk and higher margins. Credit is a good place to be when markets are going through a correction.’
The Edmond de Rothschild REIM platform operates through local operating entities in Switzerland, in France, in the UK, Benelux & Germany. It now includes over 134 real estate professionals in 9 offices (7 countries) and manages more than more than €10 bn on behalf of discretionary funds and third-party mandates.
