Risk adjusted returns offered by debt funds are proving to be an attractive alternative to traditional investments.
This highly lucrative market stems from an increase in demand for financing in prime London/European property markets while banks are reducing their exposure to this sector.
Since bridge and mezzanine facilities are no longer available from traditional sources, this supply shortfall can be exploited:
Lack of supply creates:
- Higher yields for investors.
- Bridge and Mezzanine investors, will be able to have safer LTVs reducing risk.
- Increased valuation transparency.
Higher demand for capital will improve:
- Risk/return profile.
- Access to deals which used to be bank-based.
- Quality pipeline of deals.
The Fund can exploit a long-term opportunity by lending to real estate market participants, currently restricted by lending conditions on finance in many EU countries.