Centaur Property Funds Management (Centaur) is pleased to advise that it has had a first close of its second fund, Real Estate Debt Fund 2 (RED2), with commitments of $45.8m. Investors in RED2 include industry superannuation funds and family office groups.
Centaur has positioned itself as a leading provider of sub $20m real estate backed senior and mezzanine loans and preferred equity to the Australian property development sector. Since inception, Centaur has invested $172 million across 64 separate loan transactions. 38 loan transactions have now been realised, returning $96 million to investors and achieving a gross IRR of 21.5%.
According to Centaur Managing Partner, Mark Darling, “Centaur has taken advantage of the lack of competition in the sub $20m lending space as well as the under-servicing of this sector by the major banks.”
With a bias towards 1st mortgage senior lending, RED2 will target an IRR of 12.5% net to investors and will seek to create a diversified portfolio of senior and mezzanine property loans.
Centaur Managing Partner, Joshua Rowe, commented that “The lack of available credit means that investors are enjoying strong risk adjusted returns particularly in the 1st mortgage space where the banks have pulled back significantly. Borrowers are willing to pay a premium to ensure speed and certainty of funding.”
Since closing the fund on 1 July 2016, RED2 has made 6 loan investments and has received over $400m in loan proposals. RED2 is still open for investment and expects to have a second close by the end of the calendar year.