European investor Urban Partners has announced the first close of its second real estate credit fund at €200m (£171.2m) backed by Danish institutional pension funds Industriens Pension and Lægernes Pension.

Urban Partners Credit II (UPC II) is a whole loan fund investing in senior secured real estate loans across the real estate value chain in the Nordics, specifically Sweden, Denmark and Finland, as well as Germany.

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UPC II aims to address the “structural funding gap” that experienced sponsors and developers in the mid-market space face amid increased regulation and macroeconomic uncertainty, according to Urban Partners.

Its focus is on defensive sectors supported by “long-term tailwinds”, including residential, logistics and social infrastructure, with selective exposure to other asset classes.

The firm confirmed that fundraising for UPC II is ongoing, with further closes expected “in due course”, as part of its expanding credit platform.

“The first close for UPC II reflects continued investor interest in our approach to real estate credit and the opportunities we see across the Nordics and Germany,” said Jens Stender, co-chief executive of Urban Partners.

“By combining local market access with disciplined underwriting and active loan management, we believe Urban Partners’ credit team is well positioned to provide flexible financing solutions in markets where traditional lending capacity has become more constrained. Alternative credit has an important role to play in today’s market, and UPC II is intended to build on that focus.”

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“Through UPC II, we will continue to back high-quality sponsors bringing forward sustainable urban projects, aiming to contribute positively to urban environments while seeking to deliver attractive risk-adjusted returns for our investors,” added Emanuele Bena, head of credit at Urban Partners.

The firm’s previous credit fund has invested across mezzanine and whole loan strategies.

Urban Partners has a two-decade track record in real estate investing across Europe and more than €25bn in assets under management.

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