London-based TwentyFour Asset Management and real estate investment investment company Rutley Capital Partners have launched a fund that will invest in the CMBS market.
The Trafalgar CMBS Fund is targeting an annual yield of 10% to 12% and will mainly invest in senior 'AAA' bonds backed by prime European and U.K. commercial real estate.
According to market reports, 10% of the money invested in the fund will also be used to purchase high-quality mezzanine bonds. The fund will target a size of £100 million ($165 million) and it is expected to attract a minimum of £30 million ($49.55 million) before it starts trading in a few weeks.
The two firms pooled their expertise together on this fund, with Rutley analyzing the collateral and TwentyFour managing the credit risk. TwentyFour's portfolio managers include Rob Ford, Ben Hayward and Eoin Walsh.
The Trafalgar CMBS Fund is the second fund TwentyFour has launched this year. Its residential MBS Monument Bond Fund closed in June.