Cerberus eyes $3 bln to $4 bln for debut non-performing-loan commingled fund

  • Cerberus invests in NPLs via tailored funds, flagship pools
  • Fund will be first commingled pool focusing on NPL
  • Unclear whether fund is in market yet

Cerberus Capital Management is raising its first non-performing-loan fund that will include a broad base of limited partners, two sources with knowledge of the situation told Buyouts.

The fund will target $3 billion to $4 billion. It’s not clear whether the fund is officially in the fundraising market yet. Cerberus declined comment.

Cerberus has raised tailored vehicles focused on non-performing-loan investments for specific clients. It has also traditionally made such investments through its flagship funds. But this is the first time Cerberus is raising a commingled pool focused specifically on the NPL strategy.

The new fund will focus on commercial and residential mortgages and non-performing-loan portfolios, sources said.

Cerberus closed its most recent real estate flagship pool, Cerberus Institutional Real Estate Partners IV, on $1.8 billion in early 2017. The firm, led by Stephen Feinberg, closed its sixth flagship multistrategy fund on $4 billion in April 2017.

Both of the flagship pools invest in non-performing loans.

Cerberus was the most active buyer of commercial and residential mortgage and non-performing-loan portfolios and distressed real estate in Europe in 2016, an Evercore report shows. That was the case in 2014 and 2015.

Action Item: Check out Cerberus’s Form ADV here: http://bit.ly/2ENObt6

John Snow, chairman of Cerberus Capital Management, addresses the Detroit Economic Club about “The New Face of Private Investment” in Rochester, Michigan, on July 11, 2007. Photo courtesy Reuters/Rebecca Cook