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Bentall Kennedy holds first close of its high yield Canadian property fund

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Bentall Kennedy (Canada) Limited Partnership announced the successful first close of the Bentall Kennedy High Yield Canadian Property Fund I Limited Partnership, totaling C$145 million ($116 million) in commitments.

The first close raised $115 million in commitments from three leading Canadian institutional investors. Sun Life Assurance Company of Canada had previously committed C$30 million ($24 million) to the Fund to enable it to begin making loan commitments.

Sun Life Financial acquired Bentall Kennedy in September 2015 with the goal of expanding and diversifying the real estate capabilities of its Sun Life Investment Management business, which provides investment services to third parties and manages Sun Life's general account.

The fund will utilize Bentall Kennedy's expertise in real estate equity investments combined with Sun Life Investment Management's leading capability in the commercial mortgage market.

It is is targeting an internal rate of return to investors, after fees, of 7 percent to 9 percent, primarily through lending secured by well positioned real estate projects across Canada.

The fund will invest in high ratio first mortgages, mezzanine loans, land loans, second mortgages, participating debt and direct real estate equity.

To date, the fund has made three loan commitments for an aggregate of $25.4 million, with investments in Vancouver and Calgary.

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