BNPP AM Alts has gathered €3 billion for its latest European credit strategy, signaling strong investor appetite for transitional real estate lending. The fund manager is targeting high single-digit internal rates of return by providing debt financing for value-add property plays across the continent.

The strategy focuses on lending against transitional real estate—properties requiring renovation, repositioning, or lease-up to reach their full potential. This approach sits between core debt and development finance, capturing higher yields while maintaining real estate collateral. The associated vehicles allow the manager to deploy capital flexibly across different opportunity sets.

This fundraising comes as traditional lenders pull back from riskier real estate exposures following rate hikes. Private credit managers have stepped in to fill the gap, offering borrowers alternative financing at premium pricing. BNPP AM Alts' ability to amass €3bn demonstrates institutional investors' confidence in European property debt despite broader market uncertainty.

With transitional assets still trading at discounts from peak valuations, the manager sees an opportune window to deploy capital against properties with intrinsic value waiting to be unlocked. The scale of this raise positions BNPP AM Alts among the largest managers in the European real estate credit space.