Incus plans fifth European credit fund for 2024

The Madrid-based firm will allocate a third of capital raised to real estate debt.

Madrid-based private debt manager Incus Capital plans to launch its largest credit fund to date, through which it will aim to invest in real estate debt, among other credit opportunities.

Speaking to Real Estate Capital Europe, Martin Pommier, chief operating officer at Incus, said the firm plans to announce the launch of the fifth in its flagship credit vehicle series in 2024.

Incus plans to allocate 35 percent of the total volume raised to real estate debt opportunities, as per previous funds. The firm will aim to generate returns in the “mid-teens”, according to Pommier.

“Each of our successor funds have been larger than the previous ones. Fund V will be the same. Our firm is getting larger and seeing more deal flow,” he added.

Incus’s first fund closed on €130 million in 2012, its second on €270 million in 2015 and its third on €500 million in 2018. The firm also closed its Senior Real Asset Credit Fund I on $600 million in 2019.

Incus has invested half of the capital raised for its current vehicle, European Credit Fund IV. It closed the fourth fund in December 2022, surpassing its €500 million target volume and hitting its hard-cap of €650 million. Incus raised the capital in the midst of the covid-19 pandemic.

Through the planned fifth fund, the firm will follow a similar strategy to its predecessor vehicles by investing in what Incus describes as “speciality credit opportunities”, focused on mid-market borrowers in Spain, Portugal, Italy and France.

Incus will look to provide a variety of loans – including senior, mezzanine and bridge financing – with an average ticket size per loan of €30 million, and loan-to-value ratios ranging between 30 and 75 percent.

Separately, the firm is aiming to launch a second senior focused credit fund in the coming two weeks, as a follow up strategy to its Senior Real Asset Credit Fund I, which is now fully deployed. However, the Article 9 fund, Incus Capital European Renewables Senior Credit Fund, will not include real estate in its remit and will be restricted to renewables.

“In the meantime, we have launched a €500 million renewables credit fund and we will look to hold a first close of €250 million in August,” Pommier added.

According to REC Europe’s Top 50 Lenders 2022, by the third quarter of last year, Incus had provided €350 million in real estate loans with €257 million funding developments.