London-based Gatehouse Bank, a subsidiary of Kuwaiti firm Securities, announced it has launched its first Shariah-compliant debt fund with $100 million of committed funds from a US-based investment manager.

Natale Giostra, head of real estate finance at Gatehouse, stated that the European mezzanine fund is aiming to achieve a net IRR of 6-10%. It will invest in financing up to 85% LTV, across three to five-year terms, related to assets across Europe.

The fund doesn't target only borrowers looking for Shariah-compliant finance, he affirmed.

The main aim was to compete with mainstream lenders and that its competitive advantage would be its ability to offer whole loans, financing the senior portion of the debt off its own bank balance sheet.

“This mezzanine finance fund complements the senior balance sheet capabilities of Gatehouse and allows us to offer whole-loan financings to value added and opportunistic property strategies,” he said.

“Once again, the competitiveness of Gatehouse in the commercial real estate finance market has proven that our Shariah-compliant products are on par with those in the conventional lending space.”

Gatehouse, whose major shareholders include the sovereign wealth fund the Kuwait Investment Authority, established a property loan book earlier this year.

It has a target to finance deals worth GBP1 billion in the next three to five years.