Feldberg holds £100m second close for brown-to-green real estate impact fund

Europe-focused private real estate investment company is linking its performance fees to meeting ESG targets for the ReForm fund.

Brown-to-green real estate impact strategies are snowballing. The latest example is Feldberg Capital, which has just received an additional £50 million ($63.6 million; €58.4 million) for an impact fund that will acquire and decarbonise energy-inefficient office buildings in London.

The latest commitment, from an unnamed investor, brings Feldberg’s ReForm fund to £100 million at its second close. The fund was launched in October 2023 and has a £300 million fundraising target. Feldberg aims to leverage investor commitments to have £500 million in deployment capacity.

The firm is linking a proportion of its performance fees to meeting ESG targets. It will use Science Based Targets to implement decarbonisation plans for each asset. Feldberg will also put social objectives in place “to ensure ReForm has a meaningful positive impact for all stakeholders”, the firm said in its second close announcement.

Several real estate managers have brought brown-to-green impact strategies to market in the past year. Fidelity International, for example, launched its European Real Estate Climate Impact Fund last August. Meanwhile, Coima SGR‘s €500 million target fund – focused on office and residential assets in Italy – has been anchored by Singaporean sovereign wealth fund GIC as anchor investor. And Schroders Capital is in the process of pivoting its £466 million UK REIT into a brown-to-green product.

“The office sector is undergoing a significant structural shift with a growing division between best-in-class green workplace assets and older, less energy-efficient offices,” Feldberg’s announcement states. “This, in addition to the current challenging macroeconomic climate, has created an attractive buying opportunity.”