Caerus hits first close on RE debt fund

German alternative lender Caerus has completed the first close on its real estate debt fund, according to Real Estate Capital's sister title, Private Debt Investor.

German alternative lender Caerus has completed the first close on its real estate debt fund, according to Real Estate Capital’s sister title, Private Debt Investor.

Michael Morgenroth
Michael Morgenroth

The firm has attracted €80 million in commitments since it began marketing the strategy to institutional investors in September. Contributors to the fund include a large German insurance company and a pension fund, but their identities were not disclosed in a statement published by the lender.

“No other asset class currently offers a more attractive risk-return ratio and, particularly for insurance companies, a higher return in respect of the capital adequacy rules required under Solvency II,” said Michael Morgenroth, chief executive of Caerus Debt Investments.

It means the firm is more than a quarter of the way to its final €300 million target fund-raise. The firm is structured as a pool fund and is primarily focused on the senior debt space, investing in loans secured against real estate. It invests in whole loans as well.

However, Morgenroth told PDI in September that despite the “conservative” approach of the strategy, it will take larger risks where it makes sense, a factor highlighted in its mandate to LTVs up to 80 percent.

The strategy targets investments in the DACH region and the Benelux countries and is aiming for IRRs of 3 to 4 percent.

In 2013, Morgenroth led a management buyout of the firm, which was previously owned by Signa Holding. Patrick Züchner serves as chief investment officer. Since the firm’s inception it has completed investments valued at €800 million under its senior and whole loan strategies.

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