German firm Caerus Debt Investments has launched a new real estate debt fund, with a target final close of €300 million, according to Real Estate Capital’s sister title, Private Debt Investor.
The firm is aiming to expand its senior and whole loan strategy, for which it already runs segregated mandates.
The Dusseldorf-headquartered firm is targeting investments in Germany, Austria, Switzerland and the Benelux region, and manages what Caerus chief executive Michael Morgenroth described as a “conservative” approach to deploying capital.
Morgenroth added that the fund will take appropriate risks, where it makes sense, which is reflected in its ability to offer leverage of up to 80 percent.
A first close is due at the end of the next month, where the fund hopes to reach €75 million and a final close is expected next year, though the firm declined to give a more specific timeline. The fund has a target internal rate of return (IRR) of between 3 and 4 percent and typical transaction sizes are expected to range between €30 million and €50 million.
For Morgenroth, the fund is highly attractive to insurance companies. “No other class offers a more attractive risk-return ratio and a higher return in relation to equity securitisation required by Solvency II,” he said.
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 won mandates from individual institutional investors totalling a combined investment volume of €800 million for senior and whole loan strategies. Caerus has invested €700 million to date.