Commercial real estate debt-focused strategies gained significant traction in the first half of 2022, with 40 percent of the capital raised in the first half of the year allocated to the sector. That level is an increase from last year, when debt strategies made up about 20 percent of all capital raised and 14 percent in 2020.
The rise in activity was driven by a number of substantial fundraises from managers that include Bridge Investment Group, Kayne Anderson Capital Advisors, Pretium Partners and Berkshire Residential Investments. All told, the managers raised $9.8 billion for debt strategies in the first half of the year.
The largest fund closed in the first half of the year was Bridge’s fourth iteration of its debt strategy, Bridge Debt Strategies Fund IV. The Salt Lake City-based firm managed closed the fund with $2.9 billion of equity commitments and an investment strategy that will focus on originating first mortgages, investing in Freddie Mac K-Series B-pieces and other commercial real estate backed debt, including commercial real estate CLOs. The firm closed the fund about two-and-a-half years after its predecessor, the $1.6 billion Debt Strategies III.
Other funds raised included Madison Realty Capital’s Madison Realty Capital Debt Fund V, which raised $2.08 billion and Kayne Anderson Real Estate Fund IV, a $1.88 billion offering from Kayne Anderson Capital Advisors.