BlackRock Real Assets Achieves a EUR609m final fundraise for inaugural European real estate debt strategy
BlackRock Real Assets has raised EUR609 million for the BlackRock European Real Estate Debt Fund (ERED). This first vintage European fund is the next evolution to BlackRock’s long-standing US Real Estate Debt fund series and leverages the experience, process and network of a well-established global team.
The fund invests in junior debt secured by commercial properties primarily located in Western Europe. The Fund is Euro denominated with a conservative, pan European investment strategy targeting average 75 per cent loan to value (LTV). The fund looks to invest in offices, retail, industrial, logistics, multifamily, student accommodation and hotels. The Fund saw strong interest from over 20 different investors including public and private pension plans, insurance companies and financial institutions across EMEA and APAC.
With EUR610 billion European commercial property loans maturing between 2018 and 2021, prolonged deleveraging in the banking sector and increased regulation, we believe the market context for European Real Estate Debt can offer alternative lenders a significant opportunity. Real estate debt has the potential to generate attractive and stable net income yield for investors in excess of traditional fixed income instruments.
Robert Karnes, Global Head of Real Assets Debt at BlackRock, says: “Increased regulation and tighter credit control has led to intense competition for senior debt. By comparison, relatively little capital has been raised for high yielding debt strategies. The challenge for alternative lenders is unlocking this investment opportunity and that is where the scale and reach of BlackRock’s Real Assets platform comes into its own. We are delighted with the response from investors towards this fund, it demonstrates the strength and resiliency of the strategy.”
Anne Valentine Andrews, Global Head of BlackRock Real Assets, adds: “The European Real Estate Debt Fund aims to provide investors with stable net income, and has remained an ever-popular strategy with our clients. Given the scale of the BlackRock Real Estate platform, we have the privilege of direct access to multiple origination channels, leading to enhanced sourcing capabilities and differentiated deal flow.”
BlackRock Real Assets has 20 years of history investing in Real Estate Debt. As of 30 June, 2021, BlackRock’s Real Estate Debt platform has invested USD14 billion on behalf of institutional investors across Europe and the United States. The team is based in both New York and London, enabling access to diverse opportunities for clients across the globe.