The Real Deal Miami

Boca firm looks to raise debt fund exceeding $500M

Fund will focus on risky junior debt that offers high interest rates

February 10, 2016 03:05PM

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An aerial view of Boca Raton (Credit: WPPilot) and Richard Kayne, founder of Kayne Anderson Real Estate Advisors

An aerial view of Boca Raton (Credit: WPPilot) and Richard Kayne, founder of Kayne Anderson Real Estate Advisors

A Boca Raton private equity fund is reportedly looking to raise more than $500 million for a new debt fund.

Kayne Anderson Real Estate Advisors is one of several private equity companies making a big push into debt investments as part of their bid to cash in on troubled capital markets, according to the Wall Street Journal.

Since the first quarter of 2015, the firm has already put $225 million into debt investments that focus on junior loans offering higher interest rates as a trade-off for more risk.

One of its major opportunities: other debt investors like hedge funds, which are becoming more willing to sell their real estate debt because of struggling junk bond markets, the Journal reported.

Non-traditional lenders like Kayne have filled the gap left by banks and insurance companies that were hesitant to re-enter the commercial debt sector after the crash.

The Related Cos., a New York real estate giant, is also making a big push into commercial real estate debt. It will soon start collecting capital for a new debt fund of up to $2 billion. [Wall Street Journal]Sean Stewart-Muniz

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