Octopus reaches €266m final close for latest debt fund

Octopus Property, the specialist UK property lender and part of Octopus Group, has reached a final close of £230 mln (€266 mln) for its Commercial Real Estate Debt Fund II (CREDF II).

The fund’s strategy focuses on originating short-term loans secured by first charge against UK Commercial Property. It was launched in September 2017, targeting a £200 mln final close with a hard cap of £230 mln.

'We have seen significant demand from investors for this strategy, including existing investors looking to increase their exposure to real estate debt,' said Ludo Mackenzie, head of commercial property at Octopus Property and manager of Funds I & II.

'CREDF I’s strategy of short-term asset-backed lending offers significant mitigation of risk while delivering double-digit returns, commensurate with top quartile direct property funds of the same vintage. CREDF II will seek to replicate this, and as we enter a period of lower returns for commercial property we believe CREDF II is well positioned to outperform most direct property funds.'

CREDF II has accepted investor commitments from UK, European and Canadian pension funds and fund of funds.

Octopus' previous funds include CREDF I, a £130 mln fund closed in 2014, and CREDF Syndication, a £140 mln sidecar fund raised from existing investors in 2016. CREDF I has delivered a gross IRR of 12.5% to December 2017 with an average LTV of 58.0%.


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