Principal Global Investors has launched its first real estate debt fund available in Ucits form that will invest in US mortgage instruments.
The Real Estate Debt Fund is managed by the firm’s subsidiary – Principal Real Estate Investors – with Marc Peterson, Jason Haigh and Scott Carson co-managing the fund.
The fund invests in a diversified portfolio of US commercial mortgage-backed securities (CMBS). CMBS are structured debt, typically secured by diversified pools of first mortgages on commercial real estate properties located across the US.
Principal’s real estate arm has been investing in CMBS for institutional investors since 1998 and has grown its assets under management in the asset class to $9 billion (€8.2 billion) out of $72.2 billion in total.
Nick Lyster, global head of wealth advisory services, says that CMBS acts as a diversifier for fixed income allocations at a time when bond yields are low or negative.
The fund is registered for sale across Europe and is also planning to be registered in Singapore in the next few months.
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