UBS Global Asset Management has raised £241m (€324m) for its UK real estate debt fund.
The UBS Participating Real Estate Mortgage Fund was backed by nine institutional investors from Japan, Netherlands, Germany and the UK.
UBS and Mitsubishi Corporation are both acting as co-general partners for the closed-end fund.
The ‘participating mortgage’ model sees a share of the rental growth and capital appreciation of the underlying property taken.
The investment manager launched the fund – its first UK real estate debt fund – in December 2013. The fund, which initially targeted £500m, was seeded by Mitsubishi Corporation with £50m.
Anthony Shayle, head of global real estate, said: “This substantial final close sees a number of international investors participating in the UK real estate debt markets for the first time.
“We are seeing a high level of potential deals, which bodes well for investing the remainder of the fund into the market in a timely but tactical manner, ensuring that we remain fleet of foot in closing transactions.”
A total return of between 8% and 10% is being sought by the nine-year fund, which has written nine loans totalling £123m across 25 UK assets since inception.
Both senior and mezzanine debt is being provided by the vehicle as a single lending package, up to a 75% loan-to-value ratio.
Last year, the manager said it was exploring a follow-on strategy for continental Europe. Shayle UBS was aiming to raise €500m to €600m for the European fund by June this year. The UK and European funds would ideally “overlap” to avoid the prospect of having to turn away potential borrowers.
