Zencap AM launches new mezzanine debt fund

French group Zencap Asset Management has announced the launch of a new fund targeting mezzanine real estate debt in Western Europe.

Zencap AM said the vehicle will help small and medium-sized real estate investors to bridge the financing gap between equity and senior debt, complementing the credit offering of banks and senior debt funds.

The fund, which is targeting returns of around 10%, aims to reach a size of over €100 mln. It has already closed its first deal with the granting of mezzanine debt financing for the acquisition of a residential property in Berlin. The sponsor is a local player.

'Zencap AM is taking advantage of a market niche and offers an attractive risk return to its investors as well as a significant source of diversification,' the company said, adding that this asset class is not correlated to more traditional assets.

Zencap AM is a specialist asset manager with a strong focus on European distressed or high-yielding debt. Backed by OFI Group, the company manages six funds specialised in securitised debt, regulatory capital transactions and mezzanine real estate debt.