Colony targets second debt fund

The Los Angeles-based private equity real estate firm is targeting at least $500m for the vehicle.

Colony Capital is raising its second debt fund targeting between $500 million and $750 million, PERE has learned.

The fund – more details of which appear in the March issue of PERE magazine – follows on from Colony's debut credit vehicle, which raised $900 million after just one month of fundraising. That fundraising effort was led by founder and chairman Tom Barrack, with Colony approaching longtime investors for commitments. Now with the vehicle majority invested, Colony is raising the follow-on fund.

In January, Colony successfully bid to take over an entire portfolio of more than 1,200 loans from the US banking regulator, the Federal Deposit Insurance Corporation. The loans, with a face value of $1.02 billion, were acquired with an equity investment of $90.5 million and government financing of $233 million in corporate guaranteed notes.

The deal, which saw Colony take a 40 percent stake in the venture alongside the FDIC’s 60 percent interest, was split across three Colony vehicles, including the CDCF I, the $4 billion Colony Investors VIII and the mortgage REIT, Colony Financial.