The firm, which manages €31 billion of property assets as at year-end 2018, has raised €550 million from external investors, of which €250 million is for its commingled fund; €200 million for a segregated mandate on behalf of a UK pension fund and €100 million for another mandate from a Belgian insurer.
Amundi’s strategy, which is focused on senior lending across the eurozone, has attracted an additional €500 million from the group’s insurance companies, including a €300 million segregated lending mandate from Crédit Agricole Assurances, the insurance arm of one of its parent banks.
“We have developed our real estate debt strategy faster than initially thought, reaching the €1 billion threshold of capital deployed in real estate loans across Europe,” said Thierry Vallière, global head of private debt.
“We have noticed strong interest from insurers in the asset class, as it provides a premium return in the range of 100 to 150 basis points compared to other fixed income products such as BBB bonds issued by REITs which typically generate 60bps,” Vallière noted, adding that real estate debt also provides investors with the benefit of diversification and low volatility.
In January, Amundi held the first close for its debut real estate debt fund, raising around €150 million from third-party investors. Since then, the vehicle has received subscriptions increasing its capital to €250 million, and it is expected to reach €400 million by the end of the year. The fund now registers subscriptions any time, which optimises the fund’s investment capacity, Vallière said.
Through the fund, Amundi has deployed €180 million across six loans in France, the Netherlands, Spain and Italy. The loans, with an average loan-to-value of 58 percent and a blended spread of around 230bps, have been issued against a variety of asset classes including office, retail and hospitality, with tenures between four and seven years.
This article was first published by sister publication Real Estate Capital.