22 Sep 2008
Investcorp, the asset management firm specializing in alternative investments, today announced the launch of the ‘Investcorp Real Estate Credit Fund, L.P.’ a US$1 billion credit investment vehicle that has been formed to acquire whole loans, mezzanine loans, and commercial mortgage-backed securities (CMBS) collateralized by well performing commercial and residential real estate assets throughout the United States.
A sovereign wealth fund from the Gulf region has committed US$850 million to the vehicle, and Investcorp, in keeping with its commitment to invest alongside its clients, has committed a further US$150 million. Investcorp and its partners will evaluate opportunities to leverage their total equity investment to create some US$2-3 billion of total investment capital.
Mazin Al Khatib, Managing Director at Investcorp, and regional head for the United Arab Emirates and Saudi Arabia, said: “We are very pleased to announce this investment vehicle. We believe this endorses Investcorp’s standing as a trusted, respected partner for value-oriented real estate investments in the United States. It also demonstrates our ability to create customized investment products for sophisticated, world-class investors and especially sovereign wealth funds.”
Al Khatib added: “We believe there are strong opportunities for strong returns throughout the U.S. real estate lending markets. Investcorp has been an active investor in the U.S. real estate market for more than 25 years. We 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 in this evolving real estate marketplace.”
Investcorp has been involved in the business of originating and acquiring debt for several years, and has significantly increased its focus in this area over the past few months. As a flexible, value-oriented investor, Investcorp can adjust its investment focus quickly and pursue a broad range of transactions without a bias toward any particular investment profile, property type or geography, and by using common equity, preferred equity, mezzanine debt or a combination of these. The expansion of Investcorp’s debt business is an example of its ability to adapt to a changing market.