PGIM Real Estate, the New Jersey-based investment manager, has raised more than £1 billion (£1.29 billion; €1.18 billion) for its sixth real estate debt fund.
Pramerica Real Estate Capital VI is the largest of the firm’s funds dedicated to European private real estate debt. The firm said it had raised more than 80 percent of the capital for the fund during the nine months after the UK’s vote to leave the European Union last June.
Institutional investors that committed to the closed-ended discretionary fund included public and private pension funds, sovereign wealth fund and insurance companies from the Americas, Europe, the Middle East and Asia-Pacific.
PGIM Real Estate said the investors were attracted by the fund’s income-driven real estate debt strategy and targeted double-digit returns.
The fund will provide whole loans, mezzanine and preferred equity and will target loans from £10 million to around £100 million in deals that will include development finance funding, repositioning or other value-add initiatives.
“We are delighted with the strength of investor participation, particularly after the Brexit vote,” said Andrew Radkiewicz, global head of debt strategies for PGIM Real Estate. “We saw a fundamental increase in commitments from institutional investors’ real estate, private credit and alternative fixed income allocations, due to the sustainable risk adjusted returns offered by this asset class.”
Andrew Macland, head of UK business and European debt at PGIM Real Estate, added: “The demand for alternative funding sources continues to grow. The scale of our capital raise provides much needed liquidity in a financing market that is increasingly restricted by regulatory and structural change.”
PGIM Real Estate’s most recent private equity real estate deals include the $150 million purchase of the T Tower in Seoul, in partnership with IGIS Asset Management, and a Californian office tower for $179 million – both deals were completed in March.
PGIM Real Estate first raised private real estate debt capital in 2009. Since 2010 it has raised and deployed more than £2 billion in European private real estate debt across 60 transactions throughout western Europe.