CarVal and Fondaco launch €400m Italian loan portfolio fund

The firms are aiming to complete a first close next month and obtain 10 percent net returns over a six-year period. The fund will invest in both performing and non-performing loans secured on commercial and residential real estate.

US investor CarVal has teamed up with an Italian asset manager with the aim of raising €400 million to invest in loan portfolios in Italy, PDI sister publication Real Estate Capital has reported.

CarVal has agreed a partnership with Turin-based Fondaco, an independent asset management group, to launch a new alternative closed-end fund, Fondaco Italian Loan Portfolio Fund. The partners are targeting a first close in March.

The fund, which will target a 10 percent net return within six years, will focus on the acquisition of Italian portfolios of first-lien mortgages, both performing and non-performing, secured on residential and commercial real estate.

Fondaco said that CarVal was identified as the “ideal partner” following an international selection process. Since 2009 CarVal Investors has been an active buyer of distressed loans in the UK, Ireland, Portugal, the Netherlands and Hungary.

“CarVal Investors has been chosen as Fondaco’s partner for their significant track record in secured-loan investments, for their willingness to co-invest with the fund and to share with Fondaco and its investors, knowledge, expertise and resources, by the creation of an investment committee and a dedicated portfolio management team,” Fondaco said in a statement.

The partners are targeting investment from banks, pension funds and family offices. CarVal will invest proprietary capital directly in the new fund with the expectation of investing further capital from the funds it manages in to the portfolios originated.

“CarVal Investors is delighted to be working together with such an established Italian institution as Fondaco,” said Jody Gunderson, managing principal at CarVal Investors. “Together we are excited to pursue targeted opportunities in the secured loan portfolio sector to create value for our investors.”

Fondaco is already the asset management of nine Italian banks and two pension funds, with around €10 billion of assets under management for 29 investors.