Octopus raises €165m for UK debt fund

UK fund manager Octopus Investments has raised £130 mln (€165 mln) for a closed-end commercial real estate debt fund focusing on the UK market.

The fund will be managed by Dragonfly Property Finance, the property finance arm of Octopus which was launched five years ago and has already lent over £1 bn.

Investors in the fund include a major European family office and a number of pension funds. Simba Capital acted as placement agent for the fund.

Dragonfly is targeting an annualised internal rate of return of 11%–12% for the fund, after all fees and costs are subtracted. The fund will have a three-year commitment period with full repayment expected after around four-and-a-half years.

'The commercial property finance that we provide continues to meet a very real need in the UK market,' said Jonathan Samuels, CEO of Dragonfly. 'We provide short-term finance for entrepreneurial property investors who require speed of execution and flexible finance to unlock turnaround strategies.'

Octopus’ launch of the debt fund follows hard on the heels of its acquisition of MedicX Holdings, a UK healthcare real estate investment manager. MedicX manages over £0.9 bn of funds across the LSE-listed MedicX Fund and two private closed-end institutional funds.