M&G raises £1.35bn for twin real estate debt funds

The London-headquartered asset manager has also hired Lynn Gilbert from Renshaw Bay to lead origination activity.

M&G Investments has raised a combined £1.35bn (€1.62 billion; $2.25 billion) for two junior commercial mortgage funds.

M&G Real Estate Debt Fund II and III closed on £605 million and £750 million respectively, the London-headquartered asset manager said in a statement.

Fund II will focus on European real estate mezzanine investments, while Fund III will target the stretch senior debt portion of the mortgage capital structure.

The firm said both funds were significantly oversubscribed, receiving commitments from more than 40 institutional investors. Its first real estate debt fund held a first close in 2009 and is now fully invested.

John Barakat, head of real estate finance at M&G, said in a statement: “The response from pension funds and insurance companies to this new asset class is now extremely positive, and combined with the discretionary capital available to us for the senior mortgage strategy, gives us tremendous firepower to lend across the whole capital structure.  Having the flexibility to lend on a senior-only, junior-only, or combined whole loan basis gives borrowers certainty that we can meet their entire financing need whatever their targeted leverage.”

The firm also announced the hiring of Lynn Gilbert, who joins the 20-strong real estate finance team from asset manager Renshaw Bay. She had previously worked for Barclays Capital and Morgan Stanley.