BNPP AM closes senior fund, launches junior fundraising

BNP Paribas Asset Management has exceeded the €500 million target it set for its second senior commercial real estate debt fund and has begun capital raising for a junior debt vehicle as investors seek safe havens for their capital.

The investment management arm of French banking group BNP Paribas said its BNP Paribas European Real Estate Debt Fund II had received more than €700 million of commitments to the Continental European strategy, which is built around financing “resilient” asset types.

BNPP AM said it was interested in lending against offices with efficient ESG ratings and limited vacancy rates, and the logistics sector, due to its low vacancy rates and the opportunities created by supply chain disruption. It also views residential as a stable asset class, with strong cashflows and ample liquidity.

Christophe Montcerisier, head of real estate debt at BNPP AM, said: “In the post-pandemic environment of increased volatility, rising interest rates and mounting inflationary pressures, now is an appropriate time to invest in real estate debt.

“Financial investors are looking for safe havens and private debt is one of them.”

Montcerisier said capital raising for its junior fund had already begun, with “firm commitments” from initial investors expected to be crystallised in the third quarter of this year.

BNPP AM closed its first senior vehicle, BNP Paribas European Real Estate Debt Fund I, in April last year with €335 million of capital. It is now fully deployed.

Montcerisier said deploying new capital into the market will be helped by the retreat of banks in the current macroeconomic climate. He said alternative lenders will be able to step in to provide borrowers with the additional amount of debt required to maintain former levels of leverage in an environment of higher interest rates and “protracted inflation”.