Tyrus targets up to €400m for new real estate debt fund

The Monaco and London-based manager is understood to have begun fundraising for its third property lending vehicle.

Tyrus Capital has launched a new real estate debt fund through which it will provide whole loans and mezzanine finance in European property markets, Real Estate Capital has learned.

The alternative investment firm, which is based between Monaco and London, is understood to be aiming to raise between €300 million and €400 million of investor capital for the fund – Tyrus Capital European Real Estate Finance III. Tyrus will target a high-single digit/low teens percent return for the opportunistic vehicle, according to sources familiar with the situation.

A first close is due to be held in around six months’ time, with final close expected in around 18 months.

The fund will be the third in a series originally launched by London-based manager Tyndaris in 2015, and the first in the series to be launched by Tyrus since it acquired the UK-based business of Tyndaris in December 2019. Tyrus, which was founded in 2009 by former Lehman Brothers executive Tony Chedraoui, almost doubled its assets under management to $2 billion through the deal.

The Tyrus European Real Estate Strategies platform is led from London by Imo Skrzypczyk, who previously worked for debt fund manager Starz Real Estate and Bank of America, and Enrique Zouein, who previously worked for private equity firms Kildare Partners and HIG Capital, as well as investment bank Houlihan Lokey. The two assumed joint management of the real estate strategy in 2019 but have been with Tyrus for more than five years.

Real Estate Capital has learned that Tyrus will take a defensive lending approach through the new fund, although it will also aim to retain upside with some equity optionality. It will target whole loans of up to around €75 million, plus subordinated loans in the order of €15 million to €50 million in deals that feature an equity cushion of at least 30 percent.

In targeting mid-market opportunities, Tyrus will continue the investment approach seen in its previous two lending funds. To date, Tyrus has targeted its lending on the UK, France, Spain, Germany, and the Netherlands – countries which will remain its major focus.

By sector, it is understood to be looking at residential, including existing assets and developments of for-sale and private rented apartments, as well as student accommodation. Offices which are subject to value-add business plans, including income-producing offices, are also understood to feature in the lending programme, as well as hotels in established markets with limited dependence on meetings, incentives, conferences, and exhibitions business.

Tyrus was ranked 21st in the Real Estate Capital Debt Fund 30, which was published in June and ranked managers by the volume of capital raised for European real estate lending strategies between 1 January 2016 and 31 December 2020. During the period, Tyrus raised $1.129 billion of capital.

In total, the TERES platform has invested €1.2 billion in more than 40 transactions across two discretionary funds, plus separate account mandates and co-investments, with no loss of principal across its loans. It has recently closed €55 million of loans in Germany, including a whole loan for the refurbishment of two student housing assets in the northwest of the country, and a mezzanine loan as part of the wider financing of a residential-led development in Berlin.