EDR REIM targets €600m for next stage of debt strategy

The firm is aiming to raise considerably more than when it first came to the European real estate credit market in 2020.

Geneva-based asset management firm Edmond de Rothschild Real Estate Investment Management is aiming to raise €600 million of fresh capital for its European real estate debt strategy – a total that would be considerably higher than the €350 million it raised in its first fundraising drive.

The firm is poised to launch a successor vehicle as it nears full deployment for its first fund, the pan-European High Yield I Real Estate Debt Fund and an associated separate account.

The Swiss company launched its maiden real estate debt fund in 2020 with a target raise of €300 million. The firm’s debt strategy was eventually split into two vehicles, the fund and a separate account. Collectively, the firm raised €350 million – €170 million for the fund and €180 million for the separate account from a German insurance company – by December 2022.

In February, Real Estate Capital Europe reported EDR REIM was in the early stages of launching a successor vehicle as its first fund was 70 percent deployed. Ralf Kind, head of real estate debt at EDR REIM, said at the time the firm expects its latest fund to be fully deployed before launching a successor vehicle later this year.

The proposed vehicle will follow the strategy of its predecessor and will be focused on providing whole loans and mezzanine debt – for four-to-five and two-to-three-year terms, respectively – across European property sectors.

Through the fund, the firm will target net returns of nine percent and provide loans up to 70 percent loan-to-value.

Speaking of the proposed vehicle, Kind said: “Investing in real estate debt offers an attractive opportunity for investors to benefit from higher interest rates, lower LTVs and tighter credit security structures.”

Kind explained in February the firm will look to broaden its investor base by targeting institutions outside of Germany. The business raised all the capital in its debut fund from German investors due to the travel restrictions posed by the global pandemic.

Kind said the business will look to reach out to Middle Eastern investors after the summer and branch out “selectively” to North American investors, as the firm does not have a presence in the US.