Schroders Capital has announced another fund close for its real estate debt platform. The group has raised £100 mln (€120 mln) from a combination of UK pension schemes and UK local authorities for its UK Senior Loan fund.
The Real Estate Debt platform includes separate UK and European Investment Grade and Senior Loan funds and a combined UK and European High Yield fund with a £1 bn fundraising target over the next 12 months.
The UK Senior Loan fund will target a gross return of 6.5% by directly originating loans of between £15-£100 mln in the UK mid-market across all real estate sectors. The team will aim to build a diversified portfolio of loans, designed to deliver attractive risk-adjusted returns combined with the downside protection offered by secured lending against commercial real estate.
The strategies are overseen by Natalie Howard, who joined as Schroders Capital’s head of Real Estate Debt in January last year.
Natalie Howard, head of Real Estate Debt, Schroders Capital, commented: ‘Traditional sources of financing began to dwindle after the Global Financial Crisis, particularly as banks reined in their lending amid closer regulatory scrutiny. But the need for real estate loans continues to grow. According to research, there is €1 trl of UK and European commercial real estate debt outstanding across European markets, with an annual financing requirement of €200 bn. We therefore believe there is a significant opportunity for Schroders Capital to meet the growing demand from institutional investors looking to diversify their private debt, real estate or fixed income portfolios.’
