BF Capital is seeking to raise €300 million for its latest real estate debt fund.
The German investment firm said the BF Capital Real Estate Debt Fund II fund will primarily invest in senior loans secured by existing real estate with the potential for value-add. At least 80% of the fund's capital will be allocated to such loans.
BF Capital managing director Manuel Keppel said the fund would target “core investments or managed green investments” primarily for real estate repositioning and repurposing.
Coppel said: “When selecting projects, we consider both environmental and social responsibility. In terms of use classification, our investments will focus on residential, community-related uses and social infrastructure.”
Coppel added that in addition to its core focus, the fund has the flexibility to invest up to 20% of its capital in lending to ESG-compliant real estate developments.
Pascal Chef, head of sales at BF Capital, said: “Real estate debt funds offer something that direct real estate investing currently struggles to achieve – investors can benefit from higher interest rates and higher credit spreads whilst simultaneously investing in the real estate sector.”
“Real estate debt can be a valuable component in portfolio diversification due to the potential for stable dividend payments. Furthermore, real estate debt offers an attractive illiquidity premium, resulting in a better risk-return profile than comparable liquid fixed income investments.”
BF Capital Real Estate Debt Fund II has a target dividend and net return of approximately 6%.
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