Catalyst Capital raises first €150m for value-add fund

London-based Catalyst Capital has raised €150m of equity commitments in a first closing for its Catalyst European Property Fund II (CEPF II), a €1.25 billion real estate fund.

The investors are a mix of US and European pension funds, US endowments, funds of funds, family offices and wealth management firms, including investors from Catalyst’s first European real estate fund, Catalyst European Property Fund I (CEPF I).

Nearly €75m of the initial commitments have already been deployed in three separate transactions in the UK and Europe.

According to Julian Newiss, founding partner at Catalyst, the current environment is providing a prime opportunity to generate strong returns. “The volume of European distressed property loan sales coming onto the market has never been higher and is set to continue as a result of the European Central Bank’s Asset Quality Review,” he said.

CEPF II is targeting the office and retail sectors and, geographically, the UK, France, Belgium, Germany and Poland, where Catalyst said it believes there is the potential to source attractive value-creation opportunities and capitalise on the market dislocation between prime and secondary assets. It will target both development and refurbishment.

The predecessor fund CEPF I, which was fully invested in 2012 has over the past year sold off more than 50% of its portfolio after upgrading and repositioning the assets. Disposals include the Les Atelier du Parc office building in Paris to Germany's Deka Immobilien for €155 million, and the office block at 30-38 New Bridge Street in the City of London to the Corporation of London for €32.45 million.