KGAL Investment Management announced on Wednesday that it has raised €370 mln of equity commitments at the first close of its KGAL Wohnen Core 3 Fund.
The fund, which raised the equity ‘in record time’, is an ESG investment vehicle which focuses exclusively on sustainable residential assets.
The fund has a strong deal pipeline of €240 mln in high-growth A-cities, and is close on sealing a major investment in Munich, KGAL said.
‘In accordance with KGAL Group’s climate strategy, the fund’s ESG strategy means that all target properties must undergo comprehensive ESG due diligence in advance,’ it added.
Social aspects such as affordable housing also play a major role in the fund’s strategy. ‘We ensure that the fund is climate neutral by means of KGAL making a compensation payment for non-avoidable CO2 emissions,’ commented André Zücker, managing director of KGAL Investment Management responsible for the real estate asset class.
The fund has a target equity volume of €400 mln but it can be expanded up to a hard cap of €500 mln. With a maximum leverage of 50%, the vehicle is expected to reach a volume of up to €1 bn.
‘Due to the high current placement volume and the soft commitments already made for the second closing, we confidently expect to place the fund this year beyond the original target volume of €400 mln,’ said Florian Martin, managing director responsible for KGAL Investment Management's institutional clients.
