Edmond de Rothschild REIM raises initial €250 million for European real estate debt strategy
Edmond de Rothschild Real Estate Investment Management (REIM) has raised an initial €250 million for its new European real estate debt strategy, focused on providing whole and mezzanine loans as well as preferred equity to investors in the major European markets.
The capital has been raised from a mix of international investors for two debt vehicles, the Edmond de Rothschild European Real Estate Debt Fund and a dedicated fund with a German insurance group. The Real Estate Debt Fund, which is targeting to deliver an income distribution of 4%-5% a year (1) and a net total return of approximately 8%, is aiming for a target size of €300 million.
The two debt vehicles have complementary risk-return profiles and may co-invest (2) in the same loan transactions with target loan-to-value ratios of 70% - 80% on average (3), potentially more on individual deals. The lending strategies focus on all major and alternative property sectors in the European real estate markets, including Germany, France, Benelux, Nordics, Spain, Italy and the UK, leveraging off Edmond de Rothschild REIM’s extensive network and local presence across Europe.
The Edmond de Rothschild Real Estate Debt platform offers a comprehensive and flexible range of debt products for borrowers across the capital stack including whole loans, mezzanine debt, select preferred equity, bridge and term facilities for existing properties and development projects.
Ralf Kind, Head of Real Estate Debt at Edmond de Rothschild REIM, said: “As an alternative lender we can provide flexible financing solutions for borrowers from a single source in an efficient and timely manner. We have a dedicated and experienced international real estate debt team based in Frankfurt and we are not distracted by any legacy, pre Covid-19, loan book positions. We can, therefore, focus entirely on new deals”.
Christophe Caspar, Global Head of Asset Management at Edmond de Rothschild Group, said: "We are now in a lenders’ market. The case for private real estate debt has become even stronger given the huge lending opportunities at lower risk and higher margins. Credit is a good place to be when markets are going through a correction".
|(1)||Based on the realization of market assumptions and by no means a promise of performance.|
|(2)||In accordance with predefined allocation rules.|
|(3)||The investment process described in this document presents several internal limits decided by the team. This reflects the current investment process that may change in the future.|