AEW, Natixis near final close on second fund – Exclusive

AEW and Natixis Asset Management’s partnership is expected to reach a final close for its second property debt fund by December, targeting up to €700 million.

The two firms, which are both subsidiaries of Natixis, have already raised €519 million for their second Senior European Loan Fund, SELF II, of which half has been deployed across eight loans.

Around 50 percent of the fund’s capital has been allocated to France and Germany, and the rest across Italy, the Benelux and Poland; with Spain a potential market for future lending.

The fund provides senior loans, with ticket sizes ranging from €30 million to €60 million. Investors include insurance companies from France and from several other countries.

“Our return target for the second fund is above 200 basis points. We have seen higher yields than expected, lending with lower risk profile,” Cyril Hoyaux, managing director and head of debt funds & mandates at AEW, told Real Estate Capital.

“We have mostly entered into syndications so far, but we are more and more investing in club deals, which, in our opinion, proves that we became a significant player in the European real estate lending universe,” Hoyaux added.

In July, the partnership participated with a €30 million investment in a club deal for the acquisition financing of the CB16 tower in the La Defense business district of Paris. In August, it wrote a €50 million ticket to finance the acquisition of a retail portfolio located in France, Germany and Poland.

The partnership between the two Natixis subsidiaries closed its first debt fund, SELF I, in 2012, having raised €323 million. That fund’s portfolio had an average margin of more than 300 basis points. Half of the capital was deployed in France, while 37 percent was allocated to the UK. The fund also provided debt in Italy and Germany.

“As for SELF I, the strategy is to build a well-diversified pan-European portfolio of senior loans. In terms of underlying assets, the main focus is on the office and retail asset classes. We also have the capacity to lend on alternative asset classes such as senior and student housing, hotels and data centres,” said Arnaud Heck, head of real estate finance at Natixis AM.

The debt fund platform of the partnership has raised more than €1 billion of equity from investors since inception.