M&G Investments has completed the fundraising for its two new junior debt funds, raising £1.35bn of capital from over 40 US and European institutional investors.
The investment manager closed its M&G Real Estate Debt Fund II with £605m of capital aimed at European mezzanine real estate debt.
Its M&G Real Estate Debt Fund III reached a final closing of £750m, which was the “hard cap” for the fund. It will be targeting the “stretch senior” portion of the mortgage capital structure.
Both funds were significantly oversubscribed.
John Barakat, M&G Investments’ head of real estate finance, said: “The response from pension funds and insurance companies to this new asset class is now extremely positive, and combined with the discretionary capital available to us for the senior mortgage strategy, gives us tremendous firepower to lend across the whole capital structure.
“Having the flexibility to lend on a senior-only, junior-only, or combined whole loan basis gives borrowers certainty that we can meet their entire financing need whatever their targeted leverage.”
M&G also announced that Lynn Gilbert has joined the real estate finance team to lead origination activity.
Gilbert has over 30 years’ real estate experience, and previously led commercial mortgage activity at Barclays Capital and Morgan Stanley. She most recently worked on the real estate debt funds at Renshaw Bay.
“Lynn’s reputation and relationships in the market are exceptional and we are thrilled to have her join our team. She has made an immediate impact in expanding our reach in the borrower community,” Barakat added.
The Real Estate Finance team at M&G now numbers around 20.
M&G was one of the first major institutions to identify the investment opportunity in real estate finance. The first closing on its initial real estate debt fund occurred in 2009. That fund is fully invested.
bridget.oconnell@estatesgazette.com
