Aviva Investors has held a second close of GBP187.5m for its UK Commercial Real Estate Senior Debt Fund.
This second close represents five investors, including four UK defined benefit schemes. Now standing at GBP287.5m, the fund is on track to meet its target of GBP500m by its final close in January 2015.
The fund was launched in July 2013 and is managed by James Tarry. It targets a yield of between 2.5 per cent and 3.5 per cent above equivalent maturity UK government bonds and invests in fixed-rate first-ranking mortgages advanced at up to 65 per cent loan to value, with five to 10 year maturities. These mortgages are secured against core and core plus UK commercial real estate, owned and managed by proven high-quality borrowers.
Tarry says: “The interest we have seen from institutional investors in the risk and return profile of senior secured debt validates our view that the opportunity in this space is highly compelling, and we believe that it will remain so for the foreseeable future.
“We continue to see a flow of attractive lending opportunities in the senior debt market. We have already deployed over GBP53m representing more than 50 per cent of our first close capital in two high-quality deals which meet the fund’s investment criteria. Our pipeline of lending business across the UK remains strong.”