Caerus starts fundraising on euro-focused RE fund

Michael Morgenroth, key man on the fund, said it will apply a conservative approach to investing in real estate as it looks to raise €300m.

Caerus Debt Investments, a Germany-based investment firm, has opened up a real estate debt investment strategy and is targeting a final close of €300 million.

The Dusseldorf-headquartered firm will complete investments in Germany, Austria, Switzerland and the Benelux region, and manages what Caerus chief executive Michael Morgenroth described as a “conservative” approach to deploying capital.

The fund will focus on senior and whole loans, but Morgenroth added that the fund will take appropriate risks, where it makes sense, which is reflected in its offering of LTVs of up to 80 percent.

A first close is due at the end of the next month, where the fund hopes to reach €75 million and a final close is expected next year, though the firm declined to give a more specific timeline. The fund has a target IRR of between 3 and 4 percent and typical transaction sizes are expected to range between €30 million and €50 million.

For Morgenroth, the fund is highly attractive to insurance companies. “No other class offers a more attractive risk-return ratio and a higher return in relation to equity securitisation required by Solvency II,” he said.

In 2013, Morgenroth led a management buyout of the firm, which was previously owned by Signa Holding. Patrick Züchner serves as chief investment officer. Since the firm’s inception it has completed investments valued at €700 million under its senior and whole loan strategies.