Mercia Asset Management has said it is seeking commitments for up to £500m for its UK Real Estate Development Debt Fund, providing institutional investors with access to a specialist private credit strategy.
The fund will focus on opportunities within UK industrial and logistics, targeting developments supported by strong occupier demand and the long-term need for modern, energy-efficient commercial space.
With Minimum Energy Efficiency Standards (MEES) expected to render a significant proportion of older UK industrial stock obsolete, the strategy is positioned to support both new-build development and the refurbishment of existing assets.
Dean Heaney, head of distribution at Mercia, said: “Investors are increasingly looking to private credit strategies that offer a combination of asset backing, downside protection and attractive risk-adjusted return potential in markets where there is a clear gap.
“Our Real Estate Development Debt Fund is built around a highly experienced team and a proven lending model, supporting experienced developers and a disciplined approach to capital preservation.”
According to the company, the fund will provide senior secured lending to experienced developers, and all investments will have first-charge security and a disciplined underwriting framework.
The strategy is managed by Frontier Development Capital (FDC), part of Mercia, which has built a 10-year track record in UK development lending without a credit loss.
The team, led by Nick Oakley and Ed Bradburn, has experience across the development cycle and longstanding relationships within the property sector.
The fund forms part of Mercia’s broader private markets offering, which spans venture capital, development capital and property finance.
Heaney said: “The strategy combines a strong track record with Mercia’s wider institutional platform, creating a compelling proposition for investors seeking exposure to secure real estate development debt.”
The strategy is aimed at institutional investors and is intended for professional investors only.
Mercia is a UK-listed, multi-asset investment manager with around £2.2bn of assets under management. Operating from 11 regional offices across the UK, it invests across venture capital, development capital and property finance.
