Asset management group Invesco’s real estate arm has launched its first private debt fund in Europe, aiming to raise €1bn in capital.
The Invesco Commercial Mortgage Income - Europe fund is an open-ended strategy domiciled in Luxembourg and will aim to lend to real estate assets with prime environmental, social and governance profiles.
Redemption requests will be met when the strategy has fund available, for example through loan repayments.
A spokesperson said that ‘this offers a level of liquidity to our investors without putting pressure on the fund to realise any of its investments’.
The fund has already completed its first transaction, providing a senior loan facility to finance a pipeline of six French and three Spanish logistics facilities, which are pre-let to an online retailer. With a focus on embedding ESG criteria into the credit analysis, the fund will analyse factors ranging from green building certification to renewable energy usage.
‘Our new fund prioritises lending on sustainable assets. Borrowers’ business plans will need to demonstrate a focus on sustainability while development loans, for instance, will focus on assets that meet best-in-class principles. Our investor base is rapidly refocusing on investments with fundamental ESG qualities,’ said Andrew Gordon, managing director, fund management, at Invesco Real Estate.
Invesco Real Estate has $92bn in assets under management and has provided 173 loans totalling $13.1bn. In Europe, the group runs $15bn across 178 assets. Including the fund’s first investment, Invesco Real Estate has now committed to €150m of loans across the UK and Europe.
Andy Rofe, managing director, head of Europe, commented: ‘The targeted returns for CMI Europe aim to offer a significant return premium over corporate bonds yet with a similar risk profile and stable cashflows which we believe will be able to provide high quality and predictable quarterly income streams for institutional investors.’
He added: ‘Real estate debt has traditionally been a UK-focused asset class but with the retrenchment of banks post-GFC, a European approach has become very attractive. With a focus on high quality properties, we are looking to invest in all types of loans, including stretched senior, whole, junior and development finance.’
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