Brunswick launches third real estate debt fund with €1.2bn

The fund will be larger than its predecessors and will focus on sustainable real estate projects.

Brunswick Real Estate has announced it is raising its third debt fund with SKr 12 billion ($1.38 billion; €1.2 billion) of commitments.

The vehicle, Brunswick Real Estate Capital III has secured investments from some of the largest institutions in the Nordics including previous investors in Brunswick funds. The firm has chosen not to publicise the target and hard-cap. A formal first close of the vehicle is expected in the Autumn.

Investors include Swedish insurer Folksam and Norwegian pension fund KLP.

It will look to extend senior loans to commercial property with clear sustainability goals. The fund is unlevered and will target growth regions with maturities of up to 10 years. Typical loan size in predecessor Fund II was €40 million with 10 loans but Brunswick anticipates making larger loans in its latest fund averaging €70 million.

Brunswick already offered green loans through its second debt fund and said this new vehicle will have a clearer focus on sustainable property investments.

The fund has a 10-year lifespan after the completion of its investment period.

Commenting on the fund, Brunswick Real Estate Capital CEO, Pontus Sundin, said: “Our business model of senior secured and long-term financing is becoming more important for the property sector as an alternative to traditional bank loans and bonds with shorter maturities.”

KPL’s chief financial officer, Aage Schaanning, added: “As Norway’s largest pension company with high focus on environment and responsible investment, KLP is pleased to see that Brunswick’s third senior debt fund will have increased attention to environmental aspects of buildings through its green framework. We particularly welcome the focus on providing incentives that may increase the environmental performance of existing buildings.”