German real estate debt fund manager Caerus Debt Investments has reached a second close on its senior and whole loan fund, raising an additional €47 million of capital mainly from a German insurer.
The Dusseldorf-based firm previously held a first close on the Archimedes fund in November 2016, by which point it had raised €82 million. It began marketing the strategy to institutional investors two months prior to the first close.
Capital commitments now stand at €129 million, Caerus said in an announcement. It is expected to have an overall value of €300 million.
The strategy targets investments in Germany, Austria, Switzerland and the Benelux countries and is aiming for IRRs of 3 to 4 percent. The fund can provide senior debt as well as whole loans, with a maximum loan-to-value of 80 percent.
The new capital comes from a “major” German insurance company as well as an increase by an existing investor, the firm said. A large German insurer and a pension fund provided the initial capital for the first close.
The debt fund also has a sub-fund into which investors can make minimum subscriptions of €10 million.
“No other asset class currently offers a more attractive risk/return ratio and a higher return, particularly for insurance companies, in relation to the equity securitisation required by Solvency II,” commented Michael Morgenroth, CEO of Caerus (pictured).
Germany’s debt fund market was the subject of a recent analysis by Real Estate Capital. Although there are a few debt fund managers active in the country, the heavy presence of the banks means there is a limited gap in the market.
“There’s not much juice in the German market for alternative lenders – it’s too liquid,” said Markus Kreuter, JLL’s head of debt advisory in Germany.
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