Safe Harbor launches $50m debt fund

The Florida-based investment firm’s second distressed debt fund will target first-position commercial real estate loans. 

Safe Harbor Equity private investment firm has launched a $50 million distressed debt fund, according to a US Securities and Exchange Commission filing.

The Safe Harbor Equity Distressed Debt Fund 2 will invest in distressed real estate debt exclusively, targeting first-position commercial real estate loans backed by retail, industrial and residential properties in the US, a source familiar with the situation told Private Debt Investor.

The typical loan-to-value ratios targeted will range from 50 to 70 percent, while the fund will target returns of at least 20 percent, the source said. For investors, the firm will target pension funds, family-owned businesses, high-net-worth individuals, family offices and institutional capital.

“We’re seeing a great number of opportunities in maturity defaults or other forms of debt that were restructured during the crisis that are maturing, which appear to be readily available,” Ralph Serrano, a managing director at Safe Harbor Equity, said in an interview.

This fund marks the Miami-based firm’s largest distressed debt fund since its founding in 2005. The firm launched a $20 million distressed debt fund in April 2015, also targeting real estate debt similar loans, LTV ratios, returns, and investors.

The fundraising environment for real estate investments has been relatively favourable this year, with the $23.2 billion of total capital raised this year by 30 September already surpassing 2015’s total of $22.4 billion. Notably, part of the strategy of Lone Star Fund X, a recently closed $5.6 billion distressed debt fund, is investing in opportunistic real estate.

Safe Harbor Equity acquires and manages non-performing commercial and residential mortgage loans, defaulted debt instruments, and distressed real estate assets. The firm has serviced, managed or executed over $200 million in debt and real estate related transactions, according to its website.