European Real Estate Debt
Strategy Overview
Investment approach
The Fiera European Real Estate Debt Strategy seeks to capitalise on the dislocation within the European commercial real estate debt market by providing bilaterally originated, senior secured real estate debt to institutional grade sponsors. The aim of the Strategy is to provide investors with attractive semi-annual dividends of >4% p.a. with capital preservation as the core overarching focus. This will be achieved by ensuring each senior debt investment benefits from first ranking security and tailored covenant packages with clearly defined pathways to exit.
The strategy is well positioned to capitalise on dislocation in the market, including the following factors:
- Market Fundamentals: There is a growing funding gap in European real estate private credit as regulatory pressures restrict the mainstream capital providers.
- Rising Interest Rates: An increased opportunity to lend on a core+ product, while still seeking target returns.
- Wall of Refinancing: An increased opportunity to lend on a core+ product, while still seeking target returns.
Target returns are not guaranteed. Inherent in any investment is the potential for loss.
Key Characteristics
- Stability: Real Estate credit provides for a contractual income stream, providing investors with a consistent and visible return.
- Downside Protection: The Fund will invest in predominantly senior secured debt at an average LTV of c.55%. This provides for a significant equity buffer and downside protection in the event that values decline.
- Yield:Senior real estate debt can and has outperformed fixed income over a long period of time (10%+ net returns exceed fixed income returns generated in the European HY index over the last 10 years).
- Real Asset Security: The Fund will benefit from mortgages over real assets (along with share pledges and other covenants). In the event of a loan default, direct recourse is to these assets which allows for a clearly defined pathway to value recovery.
- Diversity: Real estate debt as an asset class is complementary to real estate equity/direct real estate investment with very low correlation and is a defensive investment.
Disclaimer
Please read the simplified prospectus before investing. The amount of risk associated with any particular investment depends largely on your own personal circumstances including your time horizon, liquidity needs, portfolio size, income, investment knowledge and attitude toward price fluctuations. Investors should consult their financial advisor before making a decision as to whether this fund is a suitable investment for them.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
The rate of return or mathematical table shown is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the mutual fund or returns on investment in the mutual fund. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns.