Canadian pension fund OPTrust and Almanac Realty Investors are among investors participating in Asia Capital Real Estate’s (ACRE) $325m (€273m) fundraise for its latest US debt and equity vehicle.
The amount raised for ACRE Credit I exceeded the fund’s $300m target, the manager said.
ACRE said Almanac, Neuberger Berman’s private real estate investment arm, made a $320m capital commitment to various funds managed by ACRE at the beginning of the year, a large percentage of which was allocated to ACRE Credit I. OPTrust also committed an undisclosed amount of capital to the fund.
ACRE Credit I provides first mortgage bridge loans, mezzanine loans and preferred equity to multifamily owner-operators secured by institutional-grade real estate. The fund expects to generate double-digit interest rates and target internal rate of returns in the low- to mid-teens.
The manager said the fund, which was launched in the first quarter of 2020, has so far closed and committed to provide more than $700m whole loans across 17 transactions.
Les Menkes, Asia Capital Real Estate founding partner, said: “The success of our first direct lending fund comes as a result of ACRE’s widely recognised ability to understand the market and identify opportunities to deploy capital into credit investments secured by strong, incoming-producing multifamily assets.”
Daniel Jacobs, Asia Capital Real Estate partner and head of origination, said: “The uncertainty of the economic climate over the last 16 months has had acute effects for commercial real estate, causing many investors to seek a more secure risk-return profile for their commitments.
“Institutional multifamily assets offer a more stable long-term outlook than many other areas of the market. ACRE’s experience in this area, access to fresh liquidity and creative structuring approach offer a natural advantage in the sector, and we are pleased investors have taken notice.”
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