PGIM raises record €1.8b for high-yield debt fund

PRECap VII has a disciplined focus on high yield real estate debt opportunities in core liquid asset classes, in the largest European markets including the UK, Germany, France, Ireland, Netherlands, Spain and Italy. With a research driven approach, the strategy takes advantage of increasing opportunities driven by continuing regulatory change in the banking sector combined with the growing demand from borrowers for alternative sources of funding across the capital stack from large scale institutional partners.
 
Andrew Radkiewicz, global head of private debt strategy and investor solutions, commented ‘We are delighted by the commitment we have seen from investors for PRECap VII. As a secured income driven strategy, the fund attracted global demand from pension, insurance, sovereign wealth and private clients. The strategy presents an attractive proposition for investors seeking sustainable risk adjusted returns within their real estate, private credit and alternative fixed-income allocations.’
 
Andrew Macland, head of European debt, said ‘We are continuing to see compelling investment opportunities in logistics and living sectors as well as tactical opportunities in low vacancy office markets, fulfilment retail and leisure. We are focused on ‘create core’ real estate assets in liquid markets, founded on structural trends in e-commerce and supply chain, living and offices in smart cities across UK and Europe. We offer bespoke and creative capital solutions for our borrowers across a wide array of asset classes and jurisdictions and have already committed to 11 investments in PRECap VII, providing a range of whole loans, mezzanine and preferred equity investments.’
 
PRECap VII commitments include a mezzanine loan to support the funding of close to a dozen logistics projects totaling over €500 mln across Italy; a preferred equity loan for a highly-regarded specialist developer and operator, to finance £240 mln of Purpose Built Student Accommodation (PBSA) developments located in the UK as well as  mezzanine loan and preferred equity commitment, to support the redevelopment of a €125 mln office building in Dublin, Ireland.
    
PGIM Real Estate’s European debt platform provides alternative financing, including senior debt, whole loans and mezzanine with co-invest equity. The platform has completed over €10 bn across over 180 senior and high yield debt investments in UK and Continental Europe, through its PRECap series of funds, as well as its senior debt strategy, which also recently closed a global mandate of €1 bn from a European investor.