Balbec Raises More Than $900M for Flagship Fund

A New York-based alternative asset manager amassed a war chest of nearly $1 billion to scoop up mortgage debt across sectors.

Balbec Capital closed its latest flagship fund with $930 million in commitments, Bloomberg reported. The fund’s commitments were disclosed in a Securities and Exchange Commission filing posted last week.

Balbec intends to pursue deals for residential and commercial mortgage debt in the United States and Western Europe. Specific investments are expected to include performing and non-performing residential mortgage loans, mortgage servicing rights, consumer non-performing loans and restructured payment plans, as well as commercial mortgage and bridge loans.

A spokesperson for the company declined to comment. This is the sixth flagship fund for Balbec, which brought in $1.47 billion for the most recent vehicle.

Balbec specializes in asset-based credit, but has increasingly shown an interest in real estate finance. Last month, the company acquired U.K.-based specialist property lender Funding 365. It also issues residential mortgage-bond securitizations, such as a $600 million deal that went to market last week.

Meanwhile, the company launched a collateralized loan obligation in the commercial real estate sector for the first time in March.

Balbec is one of many lenders seeking to fill a gap left by banks, which tightened standards after the 2008 economic crisis. Private credit loans totaled $1.4 trillion in the second half of last year, according to the Federal Reserve.

The firm invests in more than 20 countries and counts approximately $8 billion in assets under management, according to Bisnow. The firm has issued 107 securitizations as of the end of the second quarter.

In 2023, Balbec took over the 468-key, 543,000-square-foot Hyatt in Schaumburg, Illinois, through a deed-in-lieu of foreclosure after a joint venture of Wheaton-based T2 Capital Management and Chicago-based First Equity Group encountered distress.

— Holden Walter-Warner