Invesco is aiming to raise more than €1bn in capital through its first private debt fund in Europe.
The Invesco Commercial Mortgage Income (CMI) Europe fund is an open-ended strategy domiciled in Luxembourg that aims to lend to real estate assets with prime environmental, social, and governance profiles.
The fund has completed its first transaction, proving a loan facility for six French and three Spanish logistics facilities, which are pre-let to an online retailer. A statement from Invesco said that it aims to invest in opportunities offering the best possible risk-adjusted returns available to a pan-European real estate debt vehicle.
Andy Rofe, managing director, head of Europe at Invesco, said: “The targeted returns for CMI Europe aim to offer a significant return premium over corporate bonds yet with a similar risk profile and stable cashflows which we believe will be able to provide high quality and predictable quarterly income streams for institutional investors.”
He added: “Real estate debt has traditionally been a UK-focused asset class but with the retrenchment of banks post-GFC, a European approach has become very attractive. With a focus on high quality properties, we are looking to invest in all types of loans, including stretched senior, whole, junior, and development finance.”
Other claims made by Invesco centre around the fund’s ESG credentials. It said that ESG criteria are embedded into the fund’s credit analysis, due diligence, and approval process, with the team analysing the quality of the assets, business plans, and borrowers. Factors include EPC ratings, green building certification, renewable energy usage, and tenant ESG policies.
For the strategy’s first loan, the assets are expected to achieve BREAAM Very Good certification and include photovoltaic panels, the reuse of rainwater for green spaces, and electric vehicle charging stations.
The firm said it has also committed to €150m of loans across the UK and Europe and expect to commit significant further capital prior to the end of 2022.