Canada Pension Plan Investment Board (CPP Investments), through its Real Assets Credit (RAC) investment group, and Acofi Gestion have confirmed a business partnership to invest in middle-market real estate credit opportunities across France. CPP Investments has committed €185 million to this investment strategy.
The venture will be advised by Acofi Gestion and will provide borrowers with a suite of debt financing solutions, targeting medium-sized whole loans and mezzanine loans to support commercial real estate in France. The partnership will invest in higher leverage, middle-market financings against stabilised, transitional and development assets that are not currently supported by mainstream lenders and will pursue an investment strategy that is diversified in terms of instrument, asset class and geography.
“With France as one of the largest commercial real estate markets in Europe, we have identified a clear shortage of local, flexible and structured sources of debt finance, particularly for more complex transactions,” said , Alain Carrier, Head of Europe, Head of International, CPP Investments. “As part of our broader growth strategy across Europe, we have selected Acofi Gestion as our partner to tap into this opportunity, providing long-term capital which will ultimately generate strong risk-adjusted returns.”
This new partnership represents RAC’s second commitment to the European middle-market lending space, with an established partnership already covering Spain and Portugal. It forms part of an investment strategy to efficiently invest into the highly fragmented, multi-jurisdictional real estate lending markets across Europe. RAC’s partnerships in Spain, Portugal and France are strong pillars of the European middle-market strategy, complementing its existing direct origination business that focuses on larger-scale, complex financing solutions.
“Our new partnership with CPP Investments allows us to leverage our extensive on-the-ground direct sourcing network, and underwriting and asset management capabilities to support the deployment of this new and significant mandate,” said Christophe Murciani, Head of CRE Debt funds at Acofi Gestion. “The venture will provide borrowers in France a new source of flexible capital to cater for their needs at a time when funding has become complex to source.”