In a significant financial manoeuvre, Midlands-based LGPS Central has channelled £200 million into M&G Investments’ most recent offering of real estate debt funds, demonstrating a robust commitment to the property sector. The investment forms part of a larger financial infusion that saw the funds achieve an initial close at approximately £350 million, courtesy of contributions from LGPS Central and three other M&G clients. Among these contributors was Prudential’s with-profits fund, marking its stake with a £100 million investment, and an undisclosed UK insurer pledging £25 million.

M&G Investments has voiced intentions to augment the fund’s capital over the next year and a half, aiming to expand its financial reserves further. The funds, now bolstered by these initial investments, are poised to finance real estate loans across Europe, a move facilitated by M&G’s seasoned real estate finance team.

Dan Riches, Director of Real Estate Finance at M&G, expressed satisfaction with the successful initial closing of the funds, highlighting the strong backing from cornerstone investors. Riches pointed to the current economic environment, noting that rising interest rates have led to reduced property valuations, thus offering investors more advantageous debt bases and enhanced capital preservation. He also remarked on the attractive returns within the sector, underpinned by the shift of European and Asian investors towards private market investments and debt secured against real assets.

Nadeem Hussain, Head of Private Markets at LGPS Central, shared his enthusiasm for the investment, underscoring its significance in meeting the organization’s long-term goals and obligations. Hussain praised M&G’s adeptness in portfolio construction and its prowess in managing real estate assets, which he cited as instrumental in forging this partnership.