Deutsche Asset Management has announced the successful closing for its institutional European Property Debt Fund II (EPDF II). Several anchor investors subscribed capital commitments totalling EUR 120 million during this first subscription round. Demand for the investment vehicle came primarily from German institutional investors.
EPDF II is the second fund in the European Property Debt series and the eighth investment vehicle of the firm's European property debt business. The Luxembourg-domiciled fund continues the investment strategy of its predecessor, building a diversified, pan-European portfolio of secured property financings. The predecessor fund EPDF I had significantly exceeded its original targets.
Focus on senior secured loans in the mid-market segment
In contrast to the first fund, EPDF II focuses primarily on senior secured loans in the European mid-market segment. Targeted loan volumes range between EUR 25 million and EUR 75 million. The fund management is capitalising on a market environment shaped by the ongoing retreat of traditional banks and credit institutions from this financing space.
The investment concept follows an unleveraged structure designed for reliable and predictable returns. The target return comprises annual cash distributions of 5 to 7 per cent and an internal rate of return (net IRR) of 6 to 7 per cent.
Western European core markets and established sectors
Geographically, the allocation focuses on Western European property markets, including Germany, France, the United Kingdom, Spain, the Benelux countries and the Nordic states. By sector, the portfolio targets segments with sound fundamentals, including logistics assets, residential properties, student accommodation and prime office buildings.
Clemens Schäfer, Global Head of Real Estate for Europe & APAC at Deutsche Asset Management, stated that this anchor closing represented a strong start. Over the next 18 months, active engagement with institutional investors in Europe, Asia and the Middle East will continue, with a substantial pipeline already in place for further closings. Alexander Oswatitsch, Head of European Real Estate Debt, added that the demand for flexible financing partners in the European mid-market was currently particularly high and that execution of the investment pipeline was already underway.
Since the inception of the platform, Deutsche Asset Management's real estate debt team has advised on more than 80 transactions with an aggregate volume of over EUR 3.5 billion, supported by local teams in Frankfurt, London and Paris. With a history spanning more than 50 years, the firm's global real estate platform manages property assets of over EUR 61 billion (as of September 2026).
