Pramerica raises €820m for fourth debt fund

Pramerica Real Estate Investors (Pramerica) has closed its fourth European debt vehicle after raising €820 mln of equity.

The close of Pramerica Real Estate Capital IV (PRECap IV) follows the raising of up to €520 mln in the PRECap III fund in April, and brings the amount of discretionary capital raised from institutional investors in North America, Europe and the Middle East for Pramerica’s European debt strategy to €2 bn.

Pramerica, the European arm of the real estate investment and advisory business of US-based Prudential Financial, said the PRECap platform has completed 30 debt investments since the launch of the first fund in 2010. Investments comprise over €1 bn secured on European real estate valued at more than €4 bn, predominantly in the UK and Germany.

Like Pramerica's other debt funds, PRECap IV saw high demand from investors, the company said. The fund is a value-added vehicle that offers the potential for returns between 13-17% IRR,

'The success of the latest equity raising for our European debt platform shows the level of investor interest due to strong risk-adjusted returns and the attractiveness of this flexible capital to owners of real estate,' commented Andrew Radkiewicz, co-head of Europe at Pramerica Real Estate Investors.

Pramerica believes significant opportunities remain for providers of junior debt for assets with good underlying property fundamentals, but for which traditional senior and other lenders are unable or unwilling to provide full financing. The new fund will be focused on office, retail, industrial and residential properties in the UK and Germany with deals ranging in size from €10 to over €100 mln.

Investors in PRECap IV include APG, the leading pension fund asset manager in the Netherlands, which has committed further capital to the PRECap platform having also participated in the earlier funds, as well as number of other global institutional investors.