AEW and Natixis Asset Management’s joint venture is expecting to reach a final closing for its second property debt fund by December, targeting up to €700 million.
“We have mostly entered into syndications so far, but we are more and more investing in club deals, which, in our opinion, proves that we became a significant player in the European real estate lending universe”
– Cyrial Hoyaux
The firms have already raised €519 million for their second Senior European Loan Fund, SELF II, of which half has been deployed across eight loans.
Around 30 percent of the fund’s capital has been allocated to France, and the rest across Italy, Germany, Netherlands and Poland; with Spain a potential market for future lending.
The fund provides senior loans, with ticket sizes ranging from €30 million to €60 million. French and non-French insurance companies are included among the fund’s investors.
“Our return target for the second fund is above 200 basis points. We have seen higher yields than expected, lending with lower risk profile,” Cyril Hoyaux, managing director and head of debt funds & mandates at AEW, told Real Estate Capital.
“We have mostly entered into syndications so far, but we are more and more investing in club deals, which, in our opinion, proves that we became a significant player in the European real estate lending universe,” Hoyaux added.
In July, the joint venture participated with a €30 million investment in a club deal for the acquisition financing of the CB16 tower in the La Defense business district of Paris. In August, it wrote a €50 million ticket to finance the acquisition of a retail portfolio located in France, Germany and Poland.
The joint venture between subsidiaries of Natixis closed its first debt fund, SELF I, in 2012, having raised €323 million. That fund’s portfolio had an average margin of over 300 basis points. Half of the capital was deployed in France, while 37 percent was allocated to the UK. The fund also provided debt in Italy and Germany.
“As for SELF I, the strategy is to build a well-diversified pan-European portfolio of senior loans. In terms of underlying assets, the main focus is on the office and retail asset classes. We also have the capacity to lend on alternative asset classes such as senior and student housing, hotels and data centers,” said Arnaud Heck, head of real estate finance at Natixis.
The debt fund platform of the joint venture has raised over €1 billion of equity from investors since inception.