Advantage Capital Equity Solutions, a Jacksonville, Fla.-based asset-based lender, has launched a private equity fund and is prepping a hedge fund for launch at the end of this month.
Advantage Capital’s p.e. offering, Advantage Capital Equity Fund I, launched in May and invests in “deep equity” loans, because of their real estate collateral and low loan-to-value ratios, according to Bob Parsons, senior vice president. The firm is looking to raise $74 million for the fund, its first private equity vehicle.
The firm’s maiden hedge fund, Advantage Capital Equity Fund II, will target discounted nonperforming assets: loans or properties purchased from small and regional banks and sold for less than face value. Parsons said the hedge fund has a $100 million target. Both funds will initially focus on residential real estate in California and Florida.
“We see a bottoming of the real estate market six to 18 months out but that doesn’t really affect us,” said Parsons. “As far as California and Florida are concerned, I live in Florida and we’re starting to see some stabilization in pricing in Jacksonville. There’s no bottom in sight yet for high-rise condos in south Florida but we don’t lend on high rises.”
Parsons is currently canvassing the market for seed investors for the p.e. fund and is optimistic about investors’ appetites for ABL strategies.
“There is appetite from London-based investors for PIPES and I think in time there will be good appetite for asset-based lending strategies,” he said.
Advantage Capital was founded in 2006 by Lane Bacon and Randy Miller.