Dexion Capital to launch property credit fund

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Dexion Capital is to launch a property credit fund that will be run by global investment firm Starwood Capital this year, understands.

The fund will invest in European property credit assets chosen by Starwood, investing across a range of different capital structures.

Since launch in 1991, Starwood Capital has raised nearly £11bn of equity and runs 12 funds including two debt funds, two hotel funds and several standalone and co-investment partnerships on behalf of institutional and high net worth investors.

Another proposition set to enter the debt space is an investment trust from an investment manager that deals only in the UK commercial property debt markets. Last week, Longbow announced its intention to list ICG-Longbow Senior Secured UK Property Debt Investments on the stock exchange.

The float intends to raise a minimum of £100m and is capped at £250m.

The investment company will invest in senior UK commercial property debt, by making new individual loans with a maximum exposure of 65 per cent loan to property value.

The investment company will target a dividend yield of around 6 per cent, with a target yield of 4 per cent to 5 per cent in year one as funds are invested and will aim to be fully invested within six to nine months of launch. Investec Bank has been appointed as advisers and sole bookrunner.

ICG-Longbow chairman David Hunter says: ”This new vehicle will aim to provide investors with predictable and attractive target returns with minimal risk of income or capital loss.”