Pan-European asset and investment fund manager Capital Bay Group has launched a new open-ended credit fund to facilitate financing for property developments and investments in Europe.
The Capital Bay Europe Secured (CBES) whole loan fund has been created under Luxembourg law and launches with an initial portfolio of loans in London and major UK cities.
The portfolio was originated by London-based specialist lender EVH Finance, which will act as the fund’s nominated advisor. The fund’s pipeline will expand the portfolio and fund projects in France, Germany, and Italy, to a target volume of €1.5 bn. The internal rate of return (IRR) is expected to be 6-8%. Institutional investors can participate in the fund from a minimum amount of €10 mln.
Rolf Engel, chief financial officer of Capital Bay Group and CEO of Capital Bay Fund Management, said: 'We have seen during the Corona pandemic that traditional bank financing has declined, especially for project developments, due to the uncertainties in the market and regulations such as Basel III.
'Project developers are increasingly turning to whole loan from alternative lenders to finance their projects. The CBES Whole Loan Fund picks up on this demand and provides the necessary capital. We already have very high demand for this investment opportunity.'
Victor Librae, CEO of EVH Finance, said: 'Capital Bay is a highly successful global fund manager, and we are very pleased to be partnering with them on the Secured Whole Loan Fund.
'We are seeing significant financing opportunities across the UK and Europe and look forward to executing on these through this vehicle whilst providing investors with attractive risk adjusted returns. This is a significant milestone for our business which was launched in July 2020 and has already committed over €700 mln.'