The company said the new money came from nine third-party investors and brought the funds managed by its real estate lending platform to about 10 billion euros, of which 7.5 billion has been invested.
The fund, the group’s fourth and dubbed CRE Senior 9 because it invests in senior debt, has the innovation of allowing investors’ capital to be recycled back into it once loans mature, so they can keep their investments going.
“AXA Real Estate is targeting a final fund size of around 2.5 billion euros for CRE Senior 9, making it the largest European CRE senior loan fund in the market,” the company said in a statement.
The French insurance group’s property arm has pioneered non-bank real estate lending since 2005, muscling in on a business traditionally dominated by banks.
It has since been followed by a host of yield-hungry insurers and private equity funds as interest rates on other fixed income assets like government and corporate bonds fall to record lows.
From an investor’s perspective, exposure to real estate debt provides them relatively secure yields while not tying up capital and resources if they were to directly buy real estate assets.
($1 = 0.8789 euros)
(Reporting by Leigh Thomas; Editing by Andrew Callus)
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