ACORE Capital has closed ACORE Opportunistic Credit II with $1.1 billion in commitments, exceeding the commercial real estate investment manager’s $1 billion target.
The vehicle is ACORE’s second dedicated fund for opportunistic credit investments and closed at more than four times the size of its predecessor fund. The firm launched the strategy in 2020 to pursue higher-yielding opportunities across commercial real estate by using its existing origination platform, underwriting capabilities, and borrower relationships.
ACORE said the current market environment is creating opportunities as property values reset, financing becomes more selective, and borrowers seek capital for transactions that may not fit traditional lending channels. The strategy can provide financing at senior positions in the capital structure while targeting returns that ACORE believes can be competitive with certain equity investments.
The new fund has already committed approximately $400 million across 14 transactions. Since ACORE was founded in 2015, the firm has committed about $1.34 billion to opportunistic credit investments across the strategy and related vehicles.
ACORE manages more than $17 billion in assets and originates, acquires, and manages commercial real estate credit and selected equity investments. The firm serves institutional investors globally as well as high-net-worth investors in the U.S.
The fund’s close comes during a period of continued uncertainty around interest rates, refinancing availability, transaction activity, and commercial property valuations. ACORE believes these conditions can create opportunities for lenders with the ability to structure flexible capital around assets and business plans where equity capital is more constrained.
The firm plans to deploy AOC II through its existing network of borrowers, sponsors, and intermediaries, focusing on situations where complex financing needs, discounted bases, or capital-market dislocation can produce attractive risk-adjusted credit opportunities.
KEY QUOTES:
“The strong investor demand for AOC II, which closed at more than four times the size of its predecessor fund, is a powerful endorsement of both the investment case for opportunistic real estate credit and the platform we have built at ACORE.”
Warren De Haan, CEO And Co-Founder Of ACORE Capital
“Opportunistic real estate credit continues to offer compelling risk-adjusted return potential, driven by a significant basis re-set across many asset classes that provides an attractive opportunity to finance business plans that can take advantage of today’s discounted valuations.”
Matthew Drummond, Senior Managing Director And Head Of High Yield Strategies At ACORE Capital
