Key Takeaways
- • Schroder Real Estate launched its first real estate debt vehicle, the £200 million Income Plus Real Estate Debt Fund, in association with Venn Partners, and completed its first close in March 2018.
- • Initial capital of £98 million was raised from institutional pension fund clients, with a total target of £200 million.
- • The fund will lend into under-banked segments of UK commercial real estate, targeting whole loans of £10-25 million at up to 75% loan-to-value.
- • The fund has already built a pipeline of about £40 million of opportunities following the first close.
- • The launch takes assets committed to Schroder Real Estate Capital Partners' exclusive pension strategies above £1.2 billion, and marks the eighth specialist strategy created by the team.
Summary
Schroder Real Estate has launched its first real estate debt product, the Income Plus Real Estate Debt Fund, a £200 million vehicle developed in association with Venn Partners. According to the Schroders press release, the fund completed its first close in March 2018, raising initial capital of £98 million from a number of institutional pension fund clients. The fund is targeting a total raise of £200 million.
The Income Plus Debt Fund builds on seven previous Partnership Funds created by Schroder Real Estate Capital Partners exclusively for institutional pension clients. Those strategies, combined with the new fund, will take assets committed to exclusive strategies to over £1.2 billion. Patrick Bone, Fund Manager at Schroder Real Estate Capital Partners, described the launch as the eighth specialist strategy created for clients and the team's first move into real estate debt, adding that the partnership structure has delivered consistent outperformance and that the firm sees attractive risk-adjusted returns in the strategy.
The fund will focus on under-banked areas of the UK commercial real estate market, including asset management-led deals and alternative property sectors, as well as assets aligned with Schroders' key mega themes of demographics, technology and urbanisation. It will target whole loans sized between £10 million and £25 million with loan-to-value ratios of up to 75%. Following the first close, the fund has already secured a pipeline of roughly £40 million of opportunities.
Paul House, Managing Partner at Venn Partners, said the partnership adds to Venn's four existing commercial real estate investment vehicles and offers a tailored strategy in a segment of real estate debt that continues to see strong borrower demand.
The Income Plus Debt Fund builds on seven previous Partnership Funds created by Schroder Real Estate Capital Partners exclusively for institutional pension clients. Those strategies, combined with the new fund, will take assets committed to exclusive strategies to over £1.2 billion. Patrick Bone, Fund Manager at Schroder Real Estate Capital Partners, described the launch as the eighth specialist strategy created for clients and the team's first move into real estate debt, adding that the partnership structure has delivered consistent outperformance and that the firm sees attractive risk-adjusted returns in the strategy.
The fund will focus on under-banked areas of the UK commercial real estate market, including asset management-led deals and alternative property sectors, as well as assets aligned with Schroders' key mega themes of demographics, technology and urbanisation. It will target whole loans sized between £10 million and £25 million with loan-to-value ratios of up to 75%. Following the first close, the fund has already secured a pipeline of roughly £40 million of opportunities.
Paul House, Managing Partner at Venn Partners, said the partnership adds to Venn's four existing commercial real estate investment vehicles and offers a tailored strategy in a segment of real estate debt that continues to see strong borrower demand.
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