Berenberg launches first real estate private debt fund

Germany's oldest private bank Berenberg is launching its first real estate private debt fund, joining a list of alternative financiers moving into the space traditionally occupied by the classical real estate financing banks.

This fund is primarily aimed at professional and semi-professional investors, with the Hamburg-based Berenberg partnering up with Universal-Investment Luxembourg as alternative investment fund manager.

The fund should enable investors to make broadly diversified investments in senior secured real estate financing, by covering under-exploited financing niches and deals with more complex structures. Subscriptions will start from a mid-single-digit million amount.

Strongly in focus will be land acquisitions, project developments, and existing, interim or leasehold financing of residential and commercial properties. Lending will be on the basis of first-ranking collateral, with low to moderate loan-to-value ratios in the established European markets.

Dieter Duncker, Berenberg's head of real estate finance, said investors would benefit from the bank's extensive experience in the sector. "By exploiting financing niches, assisting with complex financing structures and drawing on our experience in real estate finance, investors can achieve attractive returns while maintaining a conservative risk profile", he said.

His colleague Lars Hagemann, head of structured finance at the bank, added: "The optimal dovetailing of our real estate and structuring expertise will help in implementing innovative new approaches such as the introduction of super senior loans in real estate financing. Berenberg has already successfully established this loan structure for corporate financing."

The new debt fund complements a range of closed-end debt funds launched since 2016, by which Berenberg extends direct loans in the area of corporate financing, ship mortgage loans and financing for renewable energy and infrastructure products.