Strathclyde looks for real estate debt manager

December, 2018 Print

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The £21.5 billion Strathclyde Pension Fund is planning to appoint an asset manager for a real estate debt mandate.

The fund said it will consider a segregated solution, or pooled funds, for a mandate with a focus on senior secured direct and whole loans, lending against commercial real estate assets in the UK and Europe. It said that the debt portfolio should be positioned as sub-investment grade credit, but with the potential for limited opportunistic allocations to mezzanine/junior debt.

In a tender notice, the fund stated: “The expected returns on the mandate would be in the region of LIBOR plus 4-5% a year, net of fees and costs. The mandate size will range between £200 million and £500 million depending on how it combines with other debt mandates.”

The Strathclyde Pension Fund has target allocations of 20% to short-term enhanced yield assets and 15% to long-term enhanced yield assets. The short-term enhanced yield allocation includes mandates for direct lending and private debt, while the long-term enhanced yield allocation includes property assets.

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