France’s Natixis Global Asset Management and its wholly owned subsidiary AEW Europe, the real estate investment firm, have together reached a first close of €240 million for a European debt fund, as they become the latest managers to raise capital to take advantage of a shortage of readily available real estate financing in the region.
The Senior European Loan Fund is the first in a series of seven-year ‘sub-funds’ to be launched by Natixis and AEW Europe, they said today, adding that the maiden debut fund aimed to provide returns equivalent to investment-grade bonds.
The combination of Natixis and AEW Europe comes as no surprise given Natixis owns AEW Europe and can provide fixed-income expertise. AEW Europe, for its part is a dedicated real estate investment platform with €18.6 billion of property assets.
Together they have created an AEW Europe subsidiary company called Senior European Loan Management to directly control activities of the new fund. That management company is being advised by a team from Natixis consisting of two senior portfolio managers with a combined experience of over 25 years in fixed income, as well as by real estate debt specialists at AEW Europe.
They described the fund as having a “dual strategy” with equity to be invested both in existing loans and in financing new loans together with banks. The underlying assets are expected to be offices, retail and logistics located throughout Europe but predominantly in France, Germany and the UK.
Having reached a first close of €240 million, they eventually hope to amass enough equity to invest in a total of €500 million worth of deals.
Christian Delaire, AEW Europe’s chief executive officer, said: “The real estate financing market is experiencing a structural change with a marked decrease in funding capacity of the banking system, creating an opportunity for the emergence of new participants in real estate debt. The creation of this fund aims to offer our clients access to this new market opportunity. I am also pleased to announce that the fund should complete its first investment shortly.”