Aeriance unveils exclusive residential property fund

Aeriance Investments has launched a £100 million closed-ended debt fund, providing access to bridging loans for residential property transactions in London.

The fund, Orel, aims to capitalise on the dislocation in the short-term real-estate lending sector in the UK, and will provide two to three-year financing to property entrepreneurs and high net worth individuals, for financings in the London area.

Typical assets in the fund include high end residential properties, in locations such as Belgravia, Knightsbridge and Mayfair, which can value at around £20 million and have been resilient through the economic downturn.

Aeriance said it expects to grow the unleveraged fund to around £200 million with commitments from a range of UK and international investors, while delivering a net return of between 10-12% a year.

Daniel Bendavid, senior investment officer at Aeriance Investments, said: ‘’The UK residential real estate lending market is still characterised by a dislocation which has been created by a significant lack of liquidity from financial institutions.

‘We anticipate that this environment will continue for the forseeable future as new lending volumes from banks will probably remain expensive and severely limited, driven by new capital adequacy rules.’

The primary aim of Aeriance’s debt funds is to offer an attractive risk-return as well as regular and steady distributions to investors.

A significant part of the funds’ returns is generated through elevated liquidity premium rather than through real risk exposure.