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Maverick Real Estate Partners launching $75m debt fund

The US firm is raising its fourth such vehicle, with its principal and co-founder calling the peak of the New York real estate cycle.

Maverick Real Estate Partners is fundraising for its fourth debt fund, sister title Real Estate Capital has learned.

The private equity manager is targeting $75 million for Maverick Lien Fund IV LP, which will invest in distressed commercial mortgage, judgement, and UCC liens secured by properties within a 100-mile radius of Manhattan.

Investors may include family offices, funds, wealth managers, foundations, and endowments, and the discretionary fund will target opportunistic investments ranging from $1 million to $10 million.

“By purchasing liens at discounts, and accruing interest at higher default rates of 18 to 24 percent, Maverick’s investment basis is low compared to the underlying property value, while providing for the potential of equity-like returns,” said David Aviram, principal and co-founder at Maverick Real Estate Partners.

Aviram noted that the New York real estate market is at the peak of its cycle and the availability of debt financing has decreased, while rising interest rates will ultimately hasten distress in the market.

“New York City developers consistently underestimate the timing and cost of construction, and will blow through their budgets and the maturities of their loans,” said Aviram. “Maverick will provide capital to expedite resolution of these issues.”

The firm closed its Lien Fund III in April 2015 with $25.9 million in commitments. The company was founded in 2010 by Aviram and Ted Martell to take advantage of the distress created by the financial crisis.