Cheyne announces £7.5bn fundraising for real estate credit

The firm is raising two vehicles, which it says will benefit from ongoing transition in the real estate lending market.

Cheyne Capital has announced plans to raise £7.5 billion ($9.4 billion; €8.6 billion) for its upcoming real estate investment vehicles.

The firm said its eighth generation senior-focused Cheyne Real Estate Holdings fund is expected to benefit from a real estate market facing higher interest rates and a retreat by traditional lenders.

Its senior credit vehicle will focus on real estate loans across core, core plus, value-add and development assets in the UK and Western Europe. The eighth fund will target a capital raise of £5 billion. The firm will also look to raise an additional £2.5 billion for its capital solutions strategy focused on junior debt, hybrid credit and commercial mortgage-backed securities. The capital solutions strategy has already raised £650 million.

Areas where Cheyne has been active in recent years include the residential sector, with assets such as affordable homes, purpose-built student accommodation and senior care. It has also been investing in onshore industrial and technology-led sectors as well as office properties with strong environmental characteristics.

Ravi Stickney, managing partner and CIO of Cheyne Real Estate, said: “The end of the zero interest rate environment brings a much-needed readjustment in asset values and the move to long-term necessary, productive assets and away from obsolete assets held up by low interest rates.

“We believe that this transition will take place over the next five years. At the end of this period, the owners of thematic assets, providing for structural long-term needs, and with the highest environmental and social credentials, will thrive.”