Real Estate Capital’s Debt Fund 25: who are Europe’s leading debt fund managers?

Our Debt Fund 25 shows how the managers of private real estate capital in Europe have managed to grow their reserves since 2015.

Welcome to the second edition of our annual ranking of Europe’s real estate debt fund managers. Compiled by the research and analytics team at PDI‘s sister title, Real Estate Capital, the Debt Fund 25 ranks Europe’s leading private property debt managers by the volume of capital raised from investors between 2015 and 2019 inclusive.

As the role of non-bank lenders has grown across Europe’s real estate markets, so too has our ranking – from 20 managers in last year’s inaugural edition to 25 this time round. In 2019, the top 20 had corralled $42.7 billion of investor capital between them during the 2014-18 period. This time, the top 20 have raised $49 billion, with a total of $52.7 billion across all 25 ranked managers.

Going into 2020, private real estate debt was viewed by many institutional investors as a distinct, if niche, asset class. In response to investor demand, managers had expanded their range of lending strategies, with many adding senior debt and whole loans to higher-yielding lending products.

Although the organisations ranked across the following pages command significant volumes of dry powder, they now face the prospect of deploying it and meeting investors’ returns expectations against the backdrop of challenging market conditions as a result of the coronavirus. For many private real estate lending businesses launched in the wake of the 2007-08 financial crisis, the pandemic is the first major test of their business models and their recent years’ underwriting.

On the flipside, most of the lending teams in the ranking were assembled to capitalise on the fallout from the 2007-08 crisis, as the banks retrenched from the real estate sector. The distress and dislocation caused by the current crisis is likely to be seen by debt fund managers as a new opportunity to deploy capital in illiquid situations.

The organisations that placed highest in 2019 again feature prominently in this year’s ranking. Europe’s real estate debt fund industry is far smaller than its equity counterpart, and the early movers have established the strongest businesses. However, while the lending platforms of large investment managers and insurers dominate, smaller organisations, including specialist lenders, have also raised significant sums from investors.

In the year ahead, it will be fascinating to watch how these 25 organisations deal with the current market crisis, and to see how this is reflected when we rank the industry in 2021. In the meantime, enjoy finding out who are the leading real estate debt fund managers in Europe today.

How they deployed it

Twenty-one of the organisations featured in our fundraising ranking reported their European lending volumes over the 2015-19 period, inclusive. The below data show which debt fund managers were the market’s most active lenders, as well as the largest fundraisers. Volumes reflect lending from all capital sources, not just the third-party capital counted for our ranking.