DRC Capital raises €790m for debut whole loan fund

Independent investment advisor DRC Capital has raised £700 mln (790 mln) at the final close of its first DRC UK whole loan fund, hitting its hard cap and surpassing its target fund size of £500 mln.

According to the firm, the fund's investor base comprises primarily UK-based public and private pension schemes. The fund held its first close in December 2017 and received approved capital commitments totalling £700 mln in under 10 months.

'This is the first in what will become a series of whole loan focused products in the DRC range of investment programmes and is our seventh overall debt investment vehicle,' said Dale Lattanzio, managing partner for DRC Capital.

'The fund raise is reflective of investors’ continued desire to take advantage of the positive spread differential over similar types of credit assets.'

DRC Capital said it expected to deploy a significant portion of the fund's capital by the end of the year, after maintaining a consistent investment pace through the capital raising period. It also expects to keep investing at a similar rate next year.

The fund represents a diversified portfolio of unlevered whole loan investments in major cities and regional locations across the UK. According to DRC, it focuses on all major commercial real estate asset classes, with a preference for value-add properties which create income and where 'experienced real estate borrowers' are deploying proactive asset management.

Savills Investment Management acquired an initial 25% stake in DRC Capital in July this year. The deal included an option to acquire the remaining 75% in 2021. The investment manager said that the acquisition will allow it to broaden its investment proposition to include a range of debt lending strategies.


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