Cerberus Readies CMBS Fund

Apr 9 2013 | 10:15am ET

Cerberus Capital Management is planning a new fund to invest in commercial mortgage-backed securities, including the riskiest tranches of the derivatives.

The firm sought to sell the fund and strategy at a dinner in Manhattan last month for prospective investors. Cerberus said it believes that the CMBS Opportunities Fund could produce returns as high as 35%, The Wall Street Journal reports.

U.S. CMBS issuance is roaring back after five years of muted activity in the wake of the financial crisis. The first quarter alone saw almost $23 billion in issuance, almost half the total issuance from last year. In an investor presentation, Cerberus noted that "bad habits are returning."

In spite of that, and the risks, Cerberus told investors that it believes it can profit from CMBS. The new fund would buy both subordinated CMBS while simultaneously shorting the market with indices.

Cerberus' existing commercial-mortgage bond portfolio returned 47% last year and is up 11% this year.


In Depth

Humble in Hofstra...One Debate an Election Can Make

Sep 26 2016 | 10:20am ET

Tonight's U.S. Presidential debate, infamously coined the “Humbling in Hofstra...

Lifestyle

Quattrex Sports AG Debuts Soccer-Focused UCITS Fund

Sep 9 2016 | 9:54pm ET

Innovative alternative investment company Quattrex Sports has unveiled a new UCITS...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...