Joint venture TIAA Henderson Real Estate (TH Real Estate) has reached a first close of £138 million (€191 million; $206.4 million) on its UK Enhanced Debt Fund. The vehicle is TH Real Estate’s first commercial real estate fund and was launched in December last year.
The cash was raised from co-owner TIAA-CREF, the firm’s own capital and Aviva Investors Real Estate Multi Manager, according to a statement by the firm. The vehicle is targeting net returns of six to seven percent internal rates of return with a six percent distribution yield.
The six-year fund has already begun investing and will focus on whole loans and selective mezzanine deals with a loan-to-value ratio of 75 percent. The fund will lend to prime and strong secondary assets as well as some regional UK assets in the core-plus and value-added sectors, the statement continued. The vehicle will syndicate some of the senior portions of whole loans to boost returns.
Christoph Wagner and Shawn Kaufman (pictured), hired for the strategy in June last year, as reported by PDI, will be responsible for origination, structuring, portfolio management and syndication for the vehicle.
“We are delighted and proud to have TIAA-CREF and Aviva Investors Real Estate Multi Manager, two very experienced and respected global investors, as partners in our maiden debt Fund. Their support is a testament to the professionalism and reputation of the TH Real Estate platform,” said Christian Janssen, head of real estate debt at TH Real Estate, in the statement.
The Teachers Insurance and Annuity Association College Retirement Equities Fund (TIAA-CREF) and global asset manager Henderson Global Investors formed TH Real Estate in 2013 by spinning both their existing real estate assets outside North America into the new, combined entity which launched with $19.8 billion in assets. Henderson also sold their North American business to TIAA-CREF.
The agreement left TIAA-CREF as the majority partner with a 60 percent stake in the new TH Real Estate platform with the option to buy a further 15 percent stake.
TH Real Estate manages in excess of £9.5bn of commercial real estate assets in the UK.