Venn Partners has raised £185m from institutional investors following a second close on its discretionary debt fund.
Commitments to the Venn Commercial Real Estate Fund I come from UK and North American pension funds. Venn is aiming for a final close of £250m in the third quarter of 2016.
The company has already deployed around £150m of the available capital in the closed-ended fund.
Paul House, managing partner at Venn, said: “We have a preference for whole loans in the £25m-£50m range, but we can do smaller and we can do larger. We aren’t in competition with banks, so we typically do value-add on sites that have income.”
The fund will apply a cap of 75% loan-to-value on its deals but to date it has averaged 60%.
Deals completed so far include a £42m development and acquisition loan for the Tolworth Tower in Surbiton, Surrey, and a £97.5m development loan to Hub Residential for its Hoola Tower in the Royal Docks, E16.
House said that despite increased competition in the financing market over the past year, debt funds could still compete with banks on lending deals.
“We think that regulatory discipline and discipline from banks’ management has kept them from going too aggressively into the space we operate in. So there is a place for debt funds, not only us but the other ones you see emerging. We see this as a healthy development within the industry,” he said.
House will manage the fund alongside deputy portfolio manager Beatrice Dupont.
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