BNPP AM Alts secures €3b for enhanced CRE Debt strategy

BNP Paribas Asset Management Alts (BNPP AM Alts) has raised €3 bn for its specialised Enhanced Commercial Real Estate (CRE) Debt strategy.

Timothée Rauly and Antonio de Laurentiis

This includes both its dedicated fund and discretionary capital for co-investment. The commitments came from a diverse group of new and existing investors across Europe, Asia-Pacific, and the Americas.

The European CRE Debt market is seen as a promising area for investors. Banks are pulling back from real estate lending due to stricter regulations, creating a demand for alternative financing, especially for development and refurbishment projects. The pandemic has also highlighted the importance of highly sustainable, Grade A buildings, increasing the need for capital expenditure to mitigate obsolescence risks and further driving demand for alternative lending solutions.

The pan-European Enhanced CRE Debt strategy aims to build a portfolio of loans ranging from €50 mln to €500 mln, secured against institutional-quality, well-located assets. The strategy will primarily focus on originating senior-ranking loans with higher leverage than traditional bank offerings, as well as providing development and transitional financing. Selective investments in junior debt will also be considered if the risk-return profile is attractive.

Geographically, the strategy is expected to have significant exposure to the UK, Germany, and France, with additional allocations in Southern Europe, Benelux, and the Nordics. Sector diversification will primarily include industrial and logistics, residential, and alternative sectors, alongside office, retail, and hotels.

BNPP AM Alts has already deployed a substantial amount of capital and has a strong pipeline of opportunities. This is supported by its extensive network of real estate experts across Europe and over two decades of experience in fundraising and investing in European CRE Debt, having deployed more than €34 bn in the asset class.

Timothée Rauly, global co-head of Real Estate at BNPP AM Alts, commented: “As real estate debt has become a key component of insurers’ debt strategies and, more broadly, a key component of asset-based finance portfolios, we believe our dedicated Enhanced CRE Debt vehicle is positioned in a segment that will continue to offer a compelling investment, even in the current geopolitical situation. The success of the fundraising programme shows that investors share the same conviction and demonstrates clients’ confidence in the origination and loan management expertise of our team.”

Antonio de Laurentiis, global head of Real Asset Finance at BNPP AM Alts, added: “Having secured a significant volume of fresh commitments into the CRE debt sector via a range of vehicles, our goal now is to deploy this capital in a highly disciplined and selective way, as polarisation of the market requires it.”