Cheyne reaches £500m first close across two latest debt funds

The London-based manager, which has begun investing its sixth and seventh credit vehicles, says covid-19 has forced sponsors to adapt their strategies.

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Cheyne Capital Management, the London-based alternative investment manager, has raised £500 million (€543 million) of fresh capital for its European real estate lending strategy.

The manager has held simultaneous first closes of its two latest debt funds – Cheyne Real Estate Credit Fund VI and Cheyne Real Estate Credit Fund VII – with most of the capital raised since the beginning of covid-19 lockdowns across Europe, Real Estate Capital understands.

Cheyne is thought to be targeting a total fundraise of around £1.5 billion across the two funds.

Last week, it announced four new senior loan deals, totalling £232 million, which have been originated for the new funds. In a statement, the firm said the loans financed residential, co-living, offices and student accommodation property across the UK, France and Spain. It added that it has £800 million of transactions in the pipeline for Q4 2020.

In one of the four deals, Cheyne provided a £75 million loan to London-based residential developer Strawberry Star for the mixed-use Lu2on scheme in the town of Luton in the south of England. The residential-led scheme is being built by the end of 2021 on the former site of the town’s Vauxhall Motors factory.

In another of the four deals, Cheyne provided DTZ Investors with debt finance as part of a £70 million forward funding of a 310-room co-living scheme in south London, known as The Collective Earlsfield.

“Covid-19 has accelerated a multitude of irreversible trends in the way we live and work and there will be a long-term shift in the way real estate assets are used and valued,” Ravi Stickney, managing partner and CIO of Cheyne commented. “The nimble sponsors we work with are quickly adapting their strategies with transaction demand increasing significantly in the last few months,” he added.

Cheyne closed its fifth real estate credit vehicle, Cheyne Real Estate Credit Fund V, in July 2018 on a hard cap of £600 million.