Cheyne Capital Management has closed its fifth real estate credit fund at its hard cap of £600 million ($800 million; €673 million).

The vehicle, Cheyne Real Estate Credit Fund V, beat its $650 million initial target. The final close brings total assets under management at Cheyne’s real estate business to £2.3 billion.

Commenting on the fundraising, Cheyne Capital CEO and founder, Jonathan Lourie, said: “European real estate debt markets continue to be structurally inefficient. Regulatory pressures have reduced the lending volume and risk appetite of European banks, creating a sustained demand for nonbank lending.”

The latest fund aims to take an opportunistic approach to financing with the ability to invest across the capital structure. It aims to achieve double digit returns but with a focus on capital preservation.

Cheyne’s team believes the best opportunities currently are in senior lending to mid-market borrowers for value-add assets and for core and core plus. It added that good risk-return opportunities exist in mezzanine lending to large global institutional borrowers. All of its investments are in Western Europe.

Cheyne has shifted its focus from mezzanine towards senior debt in recent years. While its third real estate debt fund took a mezzanine focus, its fourth vehicle turned towards senior debt deals.

The fund is already 80 percent deployed, with investments including a €155 million senior facility for French luxury hotel operator LOV Hotel Collection, and a £105 million whole loan to Quintain to fund the development of residential and office buildings at London’s Wembley Park.