Slate raises $600m for inaugural credit fund

The Toronto-based manager’s fundraise comes alongside its $2.3bn purchase of Annaly Capital’s real-estate loan portfolio.

Slate Asset Management, a Toronto-based investment firm that focuses on real estate, has held a final close of its first-ever credit fund on $600 million, according to a news release.

The fund closing comes alongside Slate’s $2.33 billion acquisition of a portfolio of real estate loans, debt securities and real estate equity from Annaly Capital Management, a real estate investment trust.

In addition to the Annaly purchase, the Slate Real Estate Capital I fund will be used for flexible debt capital solutions in North America, the firm said. The fund was oversubscribed by a mix of new and old investors, including a preferred equity investment from Goldman Sachs Asset Management’s Vintage and Vintage Real Estate Partners Funds.

“For us, this transaction was an opportunity to expand our capabilities and scale our existing business of real estate equity investing, as both the fund and the acquisition are focused on commercial real estate lending,” Blair Welch, founding partner of Slate, said in an interview with Private Debt Investor.

“The private equity real estate market has matured dramatically in the last few years and today’s most compelling opportunities oftentimes require a sizable capital base and the ability to solve for complexity,” Sean Brenan, managing director at Goldman Sachs Asset Management told PDI.  “This deal brings together both of those elements, and we expect to see more like it in the future, as the market continues to evolve.”

Slate said it believes the acquisition will help it expand its investment strategy into bridge and transitional lending, acquisitions of existing loans, investments in debt securities and liquidity capability solutions to sponsors and assets. Slate is now actively looking for debt opportunities not only in the US and Canada, but Europe as well.

Founded by Blair Welch and his brother Brady, Slate invests in real estate via private funds as well as real estate investment trusts that are publicly traded on the Toronto Stock Exchange. “Brady and I began our careers in the 1990s acquiring and working out debt positions, and many other individuals at our firm have also worked in the debt business,” Blair said. The firm also backs real estate developments in Canada, according to its website.

“While the global economy is now moving beyond the pandemic, we believe that all the scars of covid have yet to be uncovered,” Blair said, speaking of potential investment opportunities. “Coming out of the pandemic, there is going to be a requirement for creative capital, and with the close of this fund, Slate is now in a position to not only buy properties, but also provide flexible capital to strong sponsors and assets that need to reposition.”