Norwegian real estate private equity group Union is targeting a fund size of NOK 3 bn (€260 mln) for its first commercial real estate debt fund, Union Real Estate Credit 1 (UREC), according to managing director and fund director Christoffer Hæhre.
‘UREC is uniquely positioned as the first private debt fund in Norway,’ he told PropertyEU.
Union became the first Norwegian company last year to receive approval by Finanstilsynet (the Financial Supervisory Authority) to issue private direct loans to businesses.
The new vehicle - UREC - focuses on senior secured direct lending structures towards commercial real estate companies across the largest cities in the Nordics. The fund is tailored to the needs of various types of professional investors, such as pension funds, life and insurance companies, foundations, and family offices.
The fundraising period has just started and it will continue for 18 months. The target return of the fund is 10%+.
‘We are in the midst of an international megatrend where we see a clear shift from bank to non-bank, and where the market for private debt is growing at a rapid pace. Norway has not previously been part of this development due to a bank monopoly on direct loans,’ Endre Folge, partner and CEO of Union Group commented last year when the group announced plans to launch a credit fund.
Fund director Hæhre joined the company last year from his previous position as director in Carnegie's Investment Banking department. He previously worked several years with commercial real estate clients at SEB.
'We are establishing a new investment product in Norway, and we believe the timing is highly attractive,' he commented. 'The fund is uniquely positioned to assess and manage risk given Union’s long and successful history in commercial real estate, leading research department and asset management expertise.'
