Cheyne Capital Management, the European alternative investment house with more than $6.5 billion of assets under management, has rolledout a debt-focused fund the real estate space.

Cheyne Capital Management, the European alternative investment house with more than $6.5 billion of assets under management, has rolled out a debt-focused fund for the real estate space, aiming it says to plug a gap left by a shortage of bank lending.

The fund, called Cheyne Real Estate Credit Holdings Fund III, or CRECH III, will, Cheyne says, “capitalise on the continuing dislocation of the European real estate debt markets and meet the growing demand for real estate finance”.

With many banks constrained from lending by capital regulations and the deleveraging process since the 2008 financial crisis, such funds can help fill a gap in the market, Cheyne argues.

Like its predecessors, CRECH I and CRECH II, CRECH III will invest in core European (mainly UK and German) real estate opportunities across the debt spectrum and via a range of instruments (commercial mortgage-backed securities, senior loans, mezzanine loans, equity and special situations workouts). These funds focus on mid-market borrowers constrained by the more stringent lending criteria and low-loan-to-value senior loans of traditional real estate lenders, as well as by the bias among non-bank players for larger ticket loans.

“As European banks continue to retreat from real estate lending due to increasing regulatory pressures, Cheyne is able to step into the void with a viable financing solution for mid-market borrowers, who are increasingly recognising the team’s ability to understand complex real estate financing needs and execute creative solutions in a short timeframe,” Stuart Fierz, co-founder of Cheyne, said.

The firm’s property team is led by Ravi Stickney with Graham Emmett as his investment partner; the team manages over $2 billion across a range of public and private funds.

(This publication recently interviewed the Cheyne team about its property and lending business – an interview will be published in WealthBriefing shortly.)