La Française Asset Management and Forum Partners are sounding out investors for a new real estate debt fund targeting Western Europe.
In the next three months, the pair plan to begin marketing the circa €350m fund to European institutions such as life insurers and corporate pension funds.
The strategy is to invest in senior and stretch-senior loans, mostly through new origination, although they aim to avoid the part of the market served by traditional banks. Their target customers include mid-sized, pan-European players such as small REITs and developers.
The fund will be managed by the same La Française team that worked on the previous, France only senior mortgage fund, led by Bertrand Carrez, head of structured finance, as well as Forum Partners’ real estate debt investment team of Ryan Papas and Rob Weinberg.
La Française bought a 24.9% interest in Forum in November with a view to expanding outside its French home market and entering value-added investing.
The fund will receive seed capital from the $600m La Française affiliate Credit Mutuel Nord Europe set aside for new property strategies and joint initiatives.
Forum Partners CEO Russell Platt said the new debt fund’s strategy was likely to involve “stretch senior, bridge or transitional loans for borrowers who need flexible capital. But it will be first lien mortgage lending; we’re not talking about second lien or mezzanine.”
La Française’s first fund, which raised €280m and targets a 275 basis points gross margin over base rate, is almost fully invested in 10 deals.
This month the vehicle completed two investments, extending about €25m of senior debt secured against two Paris hospitality assets.
However, it also plans to allocate capital from recent additional subscriptions by existing insurance company, pension fund and mutual investors during Q2.
Forum is also believed to be raising capital this year for Forum European Realty Investment Fund IV, the latest in its flagship private equity, value- added investment fund series.
Paul Jackson has been hired to work on European capital raising at Forum’s placement agent, Accord. Forum recently hired George Ahl, formerly of M3 Capital Partners, to head business development in north America.
In January, La Française and Forum acquired Cushman & Wakefield Investors to lead their move into core/core-plus pan-European direct property.
Re-named La Française Forum Real Estate Partners, the team brought $1.2bn of existing assets under management for Korean, Scandinavian and UK pension fund clients.