UNION Group launches Private Debt fund

As the first fund manager in Norway, UNION Group has received approval to issue private direct loans to businesses. With this the fund offering has been expanded to include a credit fund, which will provide customized financing solutions to real estate companies in the Nordic region.

“We are in the midst of an international megatrend where we see a clear shift from bank to non-bank, and where the market for private debt is growing at a rapid pace. Norway has not previously been part of this development due to a bank monopoly on direct loans”, says Endre Folge, partner and CEO of UNION Group.

The market for alternative debt providers is expected to offer attractive opportunities for investors, while covering a significant need among real estate companies.

"By expanding our offering to include private debt, our position as a full-service real estate company is strengthened. This is a natural evolution for us as a company", says Endre Folge.

Rising interest rates, capital scarcity, weaker macroeconomic prospects, and large debt maturities characterize the market for commercial real estate. The credit fund will function both as an alternative financing source and a long-term partner for companies operating in this market.

"Despite challenging capital market conditions for parts of the real estate sector, the rental market is generally robust. The main challenge relates to falling values and increased interest expenses, which can create liquidity challenges in connection with operations and debt refinancing", says Bjørn Henningsen, partner and co-founder of UNION.

The credit fund is managed by an experienced investment team that includes key members of senior management. The fund will be headed by Christoffer Hæhre, bringing significant experience from the Nordic credit market. He comes from the position as Director in Carnegie's Investment Banking department and has previously worked several years with commercial real estate clients at SEB.

"We are establishing a new investment product in Norway, and we believe the timing is highly attractive. The fund is uniquely positioned to assess and manage risk given UNION’s long and successful history in commercial real estate, leading research department and asset management expertise", says Christoffer Hæhre, partner in UNION Group and managing director of the credit fund.

"A minimum of 70 percent of the fund's direct loans will be secured, providing an attractive balance between risk and return, which will suit long-term, professional investors. Invested capital will be deployed immediately," says Christoffer Hæhre.

For further information, please contact:

Endre Folge, CEO UNION Group

Email: folge@union.no

Mobile: +47 95035960

Christoffer Hæhre, Managing Director UNION Credit

Email: haehre@union.no

Mobile: +47 95931585

About the market for private debt:

The market for direct loans has grown from USD 250 billion in 2010 to USD 1.4 trillion in 2022.
From January 1, 2023, the EU regulations on European Long-Term Investment Funds (ELTIF) were introduced in Norway, allowing AIF managers (alternative investment funds) to issue direct loans.
ELTIFs are intended to represent an alternative source of financing for projects in need of flexible and long-term capital.
As the first company in Norway, UNION Grou has been granted permission by Finanstilsynet (Financial Supervisory Authority) to issue private direct loans.
The fund will focus on a wide range of commercial real estate assets, particularly in the largest urban regions of Norway.
The fund is tailored to the needs of various types of professional investors, such as pension funds, life and insurance companies, foundations, and family offices.
The fund will have a strong focus on ESG and be classified as light green under Article 8.