PIMCO is back in market seeking capital for its real estate debt strategy, having raised nearly $700 million only months after wrapping up its latest multibillion dollar commingled fund, PERE sister publication Private Debt Investor has reported.
The Newport Beach, California-based asset management behemoth has rounded up $696.65 million for its PIMCO Commercial Real Estate Debt Fund, according to filings submitted with the Securities and Exchange Commission.
The commercial focus of the vehicle differs from previous vehicles, which targeted myriad debt types. The BRAVO fund series is one such strategy. BRAVO Fund III, an opportunistic vehicle that targets residential real estate, commercial real estate and specialty finance assets, among others, raised $4.18 billion, SEC filings showed. It charges a 1.5 percent management fee on invested capital and a 20 percent carried interest, February 2017 meeting materials from the New Mexico State Investment Council showed.
That vehicle’s predecessors, Fund I and Fund II, raised $2.4 billion and $5.5 billion, respectively – the latter of which saw a zero net return for the quarter ended 30 September, 2017. It had a 12-month net return of 13.38 percent and three-year net return of 10.22 percent as of that same date, according to documents from the North Dakota State Investment Board Insurance Trust.
PIMCO also targets distressed senior real estate credit with its PIMCO DiSCO II fund, specifically residential and commercial mortgage-backed securities and restructurings of those instruments, the New Mexico documents read. It also invests in collateralised loan obligations, collateralised debt obligations and asset-backed securities such as auto loans, credit cards and student loans. The vehicle had raised $2.58 billion as of 8 December, according to SEC filings.
Both the BRAVO and DiSCO funds invest in the US and Europe. Real estate debt fundraising by region – where a firm plans to deploy capital rather than where the vehicle’s investors are – has fluctuated over the past four years, but one constant has been the rise of North America, according to PDI data.
The region accounted for slightly more than one-in-five dollars raised in real estate in 2014. By 2017, that figure had risen to nearly one-in-two dollars and represented a plurality of the total capital raised in the sector.