AB Successfully Closes a Second Commercial Real Estate Debt Fund and Aggregate Commitments Surpass $2.3 Billion
AB continues to expand its alternative investments platform and capitalize on private credit opportunities
NEW YORK, April 20, 2016 /PRNewswire/ -- AllianceBernstein L.P. ("AB"), a leading global investment management firm, today announced the closing of its second commercial real estate debt fund with total commitments of $1.55 billion, surpassing its $1 billion target. AB's second fund ("Fund II") received commitments from a diverse range of global insurers, pensions, and foundations and closed at a size double the $750 million predecessor fund, AB Commercial Real Estate Debt Series I-B ("Fund I"). In connection with Fund II's closing, investors for Fund I also extended their commitment period which increased total commitments in AB's private commercial real estate credit platform to in excess of $2.3 billion.
Building off the success of Fund I and growing client demand for high-quality alternatives to traditional fixed income strategies, Fund II will continue to directly originate and purchase senior whole loans secured by transitional commercial real estate assets across the U.S. The loans are held on an unleveraged basis, aiming to generate stable, diversifying sources of floating rate income for investors. The strategy remains consistent with that of Fund I and primarily focuses on loan sizes ranging from $15 to $125 million, targeting loan-to-value ratios of 65% to 75% and strong diversification by geography and property type.
"We think the risk-adjusted returns in transitional U.S. commercial real estate debt, particularly when accessed through an unleveraged model, are very attractive, and the continued strong demand from clients across the globe is a testament to the success of our team, the differentiation of our strategy and our rigorous underwriting approach," said Roger Cozzi, CIO of Commercial Real Estate Debt.
The Real Estate Group was formed in 2009 as part of AB's efforts to expand its alternatives platform. Today, the Real Estate Group has closed more than $5 billion in capital commitments across dedicated opportunistic private equity and debt whole loan strategies. AB's broader alternatives platform totals more than $23 billion in assets and includes multi-manager offerings, absolute return equity and fixed income strategies, as well as private market offerings targeting commercial and residential real estate, middle market lending, and infrastructure.
"In about six years we've been able to build a robust real estate platform at AB from scratch and we are both fortunate and pleased that our disciplined approach has resonated with clients. Both of our recent equity and debt funds have significantly exceeded their original fundraising targets and our broader alternatives platform has continued to grow both in size and product offerings," said Jay Nydick, Co-CIO of AB's Real Estate Group.
About AB
AB is a leading global investment management firm that offers high-quality research and diversified investment services to institutional investors, individuals and private wealth clients in major world markets.
At March 31, 2016, AB Holding owned approximately 36.4% of the issued and outstanding AB Units and AXA, one of the largest global financial services organizations, owned an approximate 63.2% economic interest in AB.
Additional information about AB may be found on our website, www.abglobal.com.
This material is provided for informational purposes only
Under no circumstances may any information contained herein be construed as investment advice. This communication is not an offer for the purchase or sale of any financial instrument, product or services sponsored or provided by AB. The information contained herein reflects views of AB or its affiliates and sources it believes are reliable as of the date of this material and may change at any time after the date of this communication. Investors should discuss their individual circumstances with their appropriate investment professionals and read the applicable offering document(s) carefully before making any investment decision. AB and its affiliates may have positions in, and may effect transactions in, the markets and industry sectors described herein.
A Word about Risk
The Fund is an alternative investment strategy that could be considered to involve a high degree of risk, and is designed for investors who understand and are willing to accept these risks. There can be no assurance that any alternative investment fund will achieve its investment objectives. The Fund will not be registered with securities regulators and will be subject to reduced regulatory oversight. Performance compensation may create an incentive to make riskier investments. Alternative investments such as the Fund may involve higher fees and are subject to limitations on transferability and liquidity. The Fund is subject to strategy-specific risks, including risks associated with investments in real estate and illiquid assets, counterparty credit exposure, hedging, defaults, and the use of derivatives and leverage. A more detailed discussion of risk factors can be found in the applicable offering document(s). Forward-looking information in this material is subject to inherent limitations. Actual results will vary and the variations may be material.
SOURCE AllianceBernstein L.P.
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