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Octopus hits hard cap for real estate debt fund

London_commercial_propertySpecialist UK property lender Octopus Property has reached a final close of £230 million (€266 million) for its second real estate debt fund.

The Commercial Real Estate Debt Fund II, which focuses on originating short-term loans secured by first charge against UK commercial property, was launched in September 2017, targeting a £200 million final close with a hard cap of £230 million.

Investors include UK, European and Canadian pension funds and fund of funds.

Fund manager Ludo Mackenzie said: “We have seen significant demand from investors for this strategy, including existing investors looking to increase their exposure to real estate debt.

“Despite increased interest in the fund, we have deliberately maintained a smaller fund size to allow us to deploy commitments more quickly and focus on the best deals for our investors.”

The fund aims to complete loans with a combined value in excess of £600m over the next three years. In the six months since first close, the fund has completed 19 commercial loans with a gross value of £105.4m.

The Octopus Group increased its institutional assets under management by over £500 million in 2017 and now manages more than £1.8 billion of institutional funds.

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