Data snapshot: Debt strategies see steady demand through Q3

Torchlight, Berkshire Residential Investments and Rialto Capital all saw major fund closes during the period.

Real estate private equity managers have raised $17 billion for pure debt strategies through the third quarter of 2021, nearing the full-year total of $19 billion for 2020, according to data from affiliate title PERE.

Torchlight, a New York-based real estate private equity fund, amassed capital for the single largest debt vehicle this year with the close of the $2.04 billion Torchlight Debt Fund VII.

However, Boston-based Berkshire Residential Investments closed a pair of multifamily-focused debt strategies totaling more than $3 billion. Chief investment officer Eric Draeger tells Real Estate Capital USA that Berkshire believes the sector provides a particularly strong inflation hedge.

Miami-based Rialto Capital Management was also a major player, closing Rialto Real Estate Fund IV – Debt at $1.9 billion.

There are several hefty funds still raising capital, including PIMCO’s targeted $3 billion PIMCO Corporate Opportunities Fund III and Oaktree Capital Management’s targeted $2.75 billion Oaktree Real Estate Debt Fund III.

Meanwhile, fundraising remained strong for all North America-focused real estate strategies in the first half of 2021, according to data from PERE.

There were 57 funds closed in the first half of the year, totaling $27.47 billion. North American-focused funds raised about $8.66 billion more in the first half of 2021 than during the same period in 2020. Of that, real estate debt made up about 24 percent.