NREP raises €600m for second pan-Nordic fund

Nordic Real Estate Partners (NREP), the real estate investment manager, has held a final close on its second pan-Nordic investment fund after garnering €600 million in capital commitments.

NREP said it would be primarily targeting logistics, retail and residential assets across the Nordics on behalf of the vehicle, NREP Nordic Strategies Fund II. The firm said the only major difference between the new fund and its predecessor, aside from the total fundraise, is that Fund II will also target student housing.

The Virum, Denmark-based investment manager had originally planned to raise €400 million but, similar to its previous vehicle, easily surpassed this figure. After combining the raised equity with leverage, NREP said the fund would have total investment capacity of €1.7 billion.

The fund’s investors broke down into an even split of Nordic, European and US blue chip institutions. The firm said that not only did it receive continued support from existing investors from Fund I but also received significant oversubscription from new investors, including a slight uptick from US institutional investors.

NREP did not disclose Fund II’s targeted IRR but it is understood that it will be marginally lower than the previous fund.

Gustaf Lilliehook, partner at NREP, said the vehicle is already 35 percent committed and is expected to be more than 50 percent committed by the end of 2016.

“We will do our utmost to continue to deserve their trust by delivering stable returns across cycles based on a combination of strong non-cyclical income and value uplift from hands-on asset management,” said Lilliehook. “We continue to see attractive opportunities in the sub-segments that we target and are increasingly benefitting from our operating platforms in both our sourcing and value add activities,” he added.

In 2015, the firm raised €400 million for Fund I, which had originally targeted €325 million.

NREP was advised by Lazard and Goodwin Procter.