Publications

Foundation - DECEMBER 13, 2017

DRC Capital raises £600m for European Real Estate Debt Fund III

by Andrea Waitrovich

DRC Capital has held the final close of DRC European Real Estate Debt Fund III (DRC ERED III) with total commitments of £600 million ($802 million), hitting its hard cap and surpassing its target fund size of £500 million ($669 million).

DRC ERED III raised its capital from a high quality investor base consisting primarily of public and private pension funds and insurance investors across Europe, North America and the Middle East. New investors constituted circa 40 percent of the commitments, complementing strong interest from existing DRC investors.

The fund will originate mezzanine and whole loan investments across the United Kingdom and Western Europe and across all major commercial real estate asset classes.

DRC Capital has maintained a consistent investment pace throughout the capital raising period of DRC ERED III, deploying a significant percentage of the fund’s capital by final close, across a portfolio of investments. Based on its strong pipeline, DRC believes it will be able to maintain this current deployment pace well into the new year.

DRC ERED III continues to take advantage of the market opportunity presented by the banking sector’s need to de-lever due to ongoing regulatory reform. DRC believes the differential between the availability of commercial real estate debt in the European market and demand from borrowers demonstrates that the market opportunity continues to offer a unique value proposition for global investors wishing to seek attractive risk adjusted returns.

DRC ERED III is the third fund in DRC Capital’s high yield debt strategy, which has raised approximately GBP1.4 billion since its inception. It is the firm’s seventh fund across its three core real estate debt strategies; Senior Debt, High Yield Debt and Whole Loans and takes DRC Capital’s total capital raised to date to more than £2.3 billion ($3.08 billion).

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