Aggregate Debt Advisory and LRI Group have teamed up to launch a €500 million vehicle to invest in German real estate debt.
The fund, Aggregate Debt Fund, will aim to build a diverse portfolio of mezzanine loans focused on residential real estate developments in Germany.
Aggregate Debt Fund is structured as a Luxembourg Reserved Alternative Investment Fund (RAIF) and is initially registered for distribution in Germany, Austria, Switzerland and Luxembourg. It will raise capital from pension funds, insurance companies and family offices in these countries.
The fund is targeting an IRR of between 6 percent and 8 percent with a term of up to seven years.
Norbert Kickum, managing director of Aggregate Debt Advisory said: “Currently there are few comparable funds on the market that enable professional investors’ access to residential development finance through mezzanine capital in core locations. Especially with regard to Solvency II regulated companies, real estate debt offers an advantage over leveraged core real estate funds.”
LRI will act as the vehicle’s AIFM while Aggregate will function as the investment advisor. LRI is a Luxembourg-based investment services company that structures and administers both traditional and alternative investment strategies.
Aggregate Debt Advisory in a Berlin-based real estate debt specialist, advising funds using mezzanine capital to finance projects in German residential real estate.