Cerberus Closes Fourth Opportunistic CRE Fund

The company will use the $1.8 billion in commitments to pursue distressed or undervalued assets globally, with a focus on the United States and Western Europe.

New York—Cerberus Capital Management has completed its fourth global opportunistic real estate fund, Cerberus Institutional Real Estate Partners IV LP, by having raised $1.8 billion, the company announced Tuesday.

Ronald Kravit
Ronald Kravit

CIREP IV reportedly will pursue an investment strategy focused on distressed or otherwise undervalued real estate transactions globally, with a focus in the United States and Western Europe.

The company received commitments from more than 60 investors, including sovereign wealth funds, public pension plans, corporate plans, insurance companies, endowments, foundations and high–net worth individuals. Investors in CIREP IV include both new clients and those that have invested in earlier CIREP funds.

“We have an experienced investment team, and the firm has been successfully investing in distressed and opportunistic real estate assets for over 20 years,” Ronald Kravit, senior managing director of Cerberus, said in a prepared statement.

The Cerberus Real Estate Investment team is led by 14 senior executives who have an average of 20 years of real estate experience each.

Cerberus declined to comment on any projected time frame for deployment of CIREP IV.

The three earlier CIREP funds pursued a similar strategy of investing across all tranches of the capital structure, with the ability to adjust specific approaches, depending on market conditions. Cerberus raised $903 million for CIREP I in 2004, $910 million for CIREP II in 2008 and $1.4 billion for CIREP III in 2012.

According to Evercore’s recent “European Distressed Real Estate Market” report, cited by the Cerberus announcement, Cerberus was the most active buyer of European commercial and residential mortgage and non-performing loan portfolios and distressed real estate in 2016, a status it also achieved in 2014 and 2015. In 2016, Cerberus accounted for 19 percent of European closed volume, acquiring €9.4 billion ($10.1 billion) of secured real estate loans.

Hodes Weill Securities LLC acted as global placement agent for CIREP IV, and Axius Partners Pty Ltd. provided representation in Australia.