April 26, 2023
Fiera Real Estate UK Limited (“Fiera Real Estate”), an affiliate of global investment manager Fiera Capital Corporation (“Fiera Capital”) with over USD117 billion in AUM, has launched an open-ended pan-European real estate debt strategy (the “strategy”) that will invest into senior-secured, investment grade real estate debt loans. The strategy is targeting 10%+ net internal rate of return (“IRR”) and has secured £100m in seed commitments. This is in addition to £200m of commitments targeting higher yield UK opportunities across the debt platform.
The key driver behind the launch of the strategy is to broaden the product offering available to Fiera Real Estate’s investors by giving them exposure to an asset class that has proven resilient through cycles and the ability to take advantage of the growing funding gap in European real estate private credit. The asset class offers the potential for attractive yields, stability of income, shorter tenors compared to many other areas of private credit, as well as high quality security and robust governance and controls to mitigate downside risk.
The strategy will be investing across multiple sectors such as residential, logistics, Grade A offices, leisure assets and hotels. The focus will initially be on the UK market before it expands to select European jurisdictions.
Classified as Article 8 under the EU Sustainable Finance Disclosure Regulation (“SFDR”), the strategy will promote environmental and social characteristics through its approach to lending, with its proprietary Sustainable Lending Framework at the heart of its investment agenda. The Framework will be built into all underlying loan and underwriting assessments to ensure the strategy backs borrowers, sponsors and assets that align with Fiera Real Estate’s ambition to drive positive change and contribute to a low carbon economy.
David Renshaw and Richard Howe, the co-strategy heads, joined Fiera Real Estate in September 2022 from Cheyne Capital to set up and run the new pan-European real estate debt strategy. Mr. Renshaw and Mr. Howe boast a significant track record of lending into the European real estate market across multiple asset classes and jurisdictions. This solid experience coupled with their deep network will offer investors the opportunity to seek risk-adjusted returns at conservative leverage positions within the overall capital structure.
The strategy will draw on the expertise of the wider Fiera Capital network, which has existing real estate debt platforms with long-standing records in Asia-Pacific and Canada. Fiera Real Estate’s global private credit strategies have over USD4 billion in AUM and are well positioned to provide tailored solutions to clients’ long-term needs.
Charles Allen, Head of European Real Estate at Fiera Real Estate, commented: “Private credit is an important addition to an institutional portfolio and the launch of our strategy is a natural next step in the development of our product offering. With a team of recognised experts and excellent market coverage, we are well positioned to offer our clients strong risk adjusted returns across Europe at a very compelling time in the market cycle”.
David Renshaw, Co-Head and Managing Director Debt Strategies commented: “The opportunity set within private real estate credit was already a compelling one, but rising interest rates coupled with mainstream lenders having to deal with heritage loan books and reducing credit supply means that the timing of our strategy launch is opportune. We believe that private real estate credit will continue to grow and play an increasingly important role for both borrowers and investors within the European real estate landscape over the coming years and the launch of our strategy is a testament to that belief.”