When Incus Capital started raising capital for its latest real estate private credit fund, Martin Pommier, a partner at the Madrid-based manager, noticed a distinct shift in the profile of interested investors for the tarobtained €800 million vehicle: more were from the US.
Pommier, in a conversation with Real Estate Capital Europe, attributed the increased interest from this investor cohort – all of which would have been first-time investors in the firm – in part to geopolitical factors. More investors are keen to diversify or decrease their exposure internationally amid continued economic volatility in the region, he added.
The firm held a first close for its European Credit Fund V in September at €400 million, but Pommier noted the increased interest coming from US investors is yet to materially modify the investor pool of this fund. The fund has a hard-cap of €1 billion and Pommier is expecting a final close in the next couple of months.
Incus has so far lined up capital commitments from roughly 15 investors, all of which have invested in one of this fund’s prior vintages. Half of the existing investor base is built up of North American limited partners and the remainder are European. This is similar to previous iterations of the fund.
While some of the firm’s investors that had allocated to the firm’s third fund skipped the next iteration, Pommier declared this group then largely re-upped in the fifth vintage. “It might have been the timing wasn’t right when it came to investing in the fourth fund. Maybe some investors were focussing on other areas of credit,” he added.
Fundraising snapshot
Fundraising for European Credit Fund V has been in the works for approximately two years, an amount of time that is in line with current global real estate fundraising trfinishs.
The average time spent on the road for funds closed in H1 2025 was approximately 23.69 months, consistent with 23.25 months in full-year 2024. Time in market has steadily increased since 2020, when the average fundraising period was only 13.66 months.
The longer timeframe underscores persistent macroeconomic challenges and wavering investor confidence, both of which have had a negative impact on capital raising, as per affiliate title PERE’s H1 fundraising report for 2025.
While Pommier agrees generally fundraising is taking longer, he declared Incus was not in a rush to hold the first close of the latest vintage.
“We reached the €400 million first close of fund V in the same month that our fund IV investment period finished. This was in line with our aim to overlap our current fund with our last fund. Fundraising for us going well, and we still have one year to raise the balance, with good traction towards our next close.”
That year saw a combination of macroeconomic factors shock global finance and real estate lfinishing, including Russia’s invasion of Ukraine, the sharp rise in interest base rates, inflation hikes and global supply chain disruption. That declared, each of Incus’ successor funds have been larger than the previous ones.
Incus closed its fourth fund in December 2022, surpassing its €500 million tarobtain volume and hitting its hard-cap of €650 million. The firm raised the capital in the midst of the covid-19 pandemic and reached the hard-cap in some of the toughest fundraising conditions in recent memory.
Incus’ first fund closed on €130 million in 2012, its second on €270 million in 2015 and its third on €500 million in 2018. The firm also closed its Senior Real Asset Credit Fund I on $600 million in 2019. In 2023, it planned to launch fund V, its largest credit fund to date.
Consistent methodology
The fund series’ strategy has remained consistent from day one. Real estate credit will create up 40 percent of the fund’s deployment activity, with another 40 percent to be invested in infrastructure debt deals. The remaining 20 percent will be reserved for other types of real asset debt, which could encompass leasing, receivables, or syndicated loans that do not fit perfectly into infrastructure or real estate.
The real estate part of the fund will be split into two investment focapplys encompassing traditional and alternative real estate.
“We want to invest in a broad range of assets, which could span from more standard sectors like multi-residential and hotels to more niche markets like serviced apartments or self-storage,” Pommier declared.
The lfinisher is still tarobtaining returns in the mid-teens, providing senior, mezzanine and bridge financing with an average ticket size of €30 million and loan-to-value ratios ranging between 30 percent and 75 percent, as reported in its 2023 expectations for the fifth fund.
One thing that has modifyd is the inclusion of Germany in its geographical remit. Fund IV previously only lent in Spain, Portugal, Italy and France. Incus expects to lfinish more in Germany, following the first loan it closed in the region in January, a €60 million senior financing for the acquisition and redevelopment of a Berlin office project. Pommier declared the firm sees dislocation in that market.
Pommier declared he is seeing banks retreating from the market while local funds are either neutral or less active. The firm will focus on senior loans backed by what it sees as excellent assets.
“Where some borrowers may be in required of a capital solution, a private credit firm like us is often seen as a cheaper alternative to private equity funding, and we can also provide a more flexible solution compared to banks,” he added.
While senior financing is a key focus for Incus in the German market, the lfinisher is still keen to provide a range of financing solutions across other geographies.
For example, in Real Estate Capital Europe’s Active Lfinishers report for 2024 the firm’s lfinishing volume to the finish of Q3 reached €250 million, of which 80 percent comprised mezzanine loans. The remaining 20 percent of activity was in senior loans. All of the loans were recorded as investment loans.
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