UBS Global Asset Management has made the first loans from its fledgling UK debt fund as it works towards a second close.
The investment manager has originated four loans totalling £49.2m from its £140m Participating Real Estate Mortgage Fund, which launched in January.
The largest facility was the provision of £25m of acquisition finance on a four-year term to fund a private investor’s purchase of a UK office portfolio.
It has also made two separate loans to private investors totalling £19m for office-to-residential conversions in the South East.
The final loan was £5m on a five-year term for the refurbishment of a west London office building.
The loans are all at around 75% LTV, or 75% loan-to-cost in the case of the refurbishment loan.
The deals will generate an IRR of 9-11% per year, according to Anthony Shayle, head of global real estate – UK debt, managing director, and manager of the fund.
The fund has a target IRR of 8-10%.
A further £50m of loans are at an “advanced” stage of due diligence, according to Shayle.
UBS is aiming to reach a second close for an unspecified amount by the end of Q4, which will include further participation from existing investors.
It reached a £140m first close with three investors, including Mitsubishi Corporation, in January.
The investment period for the fund’s initial tranche lasts until June 2016.
sophia.furber@estatesgazette.com
