Investcorp’s New $1B Credit Investment Vehicle Begins Deploying Capital
- Aug 08, 2008
By Anuradha Kher, Online News EditorNew York–Investcorp’s U.S.-based real estate group recently launched a $1 billion vehicle funded with capital raised from Investcorp and its clients as well as a sovereign wealth investor in the Persian Gulf.“We will be acquiring performing loans across all property types and multifamily properties will be a significant component,” Peter Petron, principal of Investcorp, tells MHN. “This is actually a very good time for us to launch this fund because there is a lack of liquidity in the system and as a well capitalized company, we see a good opportunity.”Petron adds that the fund will not invest in distressed loans, only performing ones. “We are looking at the U.S. and are evaluating Europe as well,” he adds.The first acquisition of the fund is several mezzanine loans that are collateralized by various single-asset properties and multiple-asset hotel portfolios located across the United States. The combined portfolios of junior and senior mezzanine loans, valued at approximately $210 million, were sold to Investcorp for an undisclosed amount. “As the market transitions, opportunities emerge for Investcorp’s debt investment business,” John Fraser, co-head of Investcorp’s real estate group, says. “We have been an active investor in the U.S. real estate market for more than 25 years, and, as such, are well positioned to draw upon our extensive relationships within the lending community to seize on opportunities to grow our debt business and to deliver superior risk-adjusted returns to our partners and investors. These lending relationships are particularly relevant in today’s marketplace, both as a reliable source of debt financing for property acquisitions as well as a source of product for the debt acquisition activities.” “The expansion of our debt platform, evidenced by our significant increase in transaction volume, is a nice complement to our equity investment activity,” says Jonathan Dracos, co-head of Investcorp’s real estate group. “The plan is to continue to expand the debt platform.” The capital will be deployed within the next two to three years, according to Petron.