Contrarian targets $400m for latest distressed RE fund – exclusive

The vehicle will focus on investing in US-based commercial real estate including office buildings, retail, multifamily, industrial and hospitality assets.

Contrarian Capital Management is back in the market with its fourth real estate distressed fund.

The Greenwich, Connecticut-based firm is targeting $400 million for its Contrarian Distressed Real Estate Debt Fund IV, according to a source familiar with the situation. The fund held a first close on more than $132 million, this person added.

The firm declined to comment.

The fund will follow a similar strategy to its predecessors and invest in US-based distressed commercial real estate, which includes hospitality, office buildings, retail, multifamily and industrial assets, the source said.

Contrarian tends to invest outside of the larger “gateway markets” to pursue mid-size distressed opportunities, according to its website. The firm’s strategy is also event-driven and it usually finds its investments through balance sheet restructurings, according to documents filed with the SEC.

Fund IV received a re-up commitment of $30 million from the Municipal Fire and Police Retirement System of Iowa, which invested $50 million in both Fund III and Fund II.

Fund III closed in 2016 on more than $378 million of capital commitments. It received a commitment of $25 million from the Denver Employees Retirement System (DERP), as well as commitments of nondisclosed amounts from other pension funds and endowments.

Fund II closed in 2012 on more than $450 million in committed capital. DERP committed $20 million to that fund as well.

Contrarian was founded in 1995 and focuses on emerging markets and real estate strategies.