Torchlight closes Fund IV on $956m

The firm may pursue a follow-up vehicle later this year. 

Torchlight Investors held a final close for its fourth debt opportunity fund on $956 million the firm confirmed to Private Debt Investor. Torchlight Debt Opportunity Fund IV closed in December.

A Form D filed with the US Securities and Exchange Commission on Thursday indicated that the firm raised approximately $942 million for the fund. A firm spokesperson indicated that the discrepancy was possibly related to the inclusion of a sponsor commitment.  

The fund’s limited partner base includes public pensions and sovereign wealth funds, the firm said. PERE’s research and analytics division lists the Illinois Municipal Retirement Fund, Los Angeles City Employees’ Retirement System (LACERS), the Employees Retirement System of Texas, the South Carolina Retirement System, Nebraska Investment Council and San Diego City Employees’ Retirement System among the fund’s LPs.

The firm held a first close for Fund IV in August 2012 and has been extremely active since, having invested approximately $600 million of the vehicle’s capital, the firm disclosed to Private Debt Investor. At its investment current pace, it is possible Torchlight may begin raising a follow-up vehicle later this year.

Fund IV invests in commercial real estate securities such as CMBS, mezzanine debt, B-notes, preferred notes and financing for distressed mortgages. 

Last month, Torchlight announced that it had used Fund IV to provide $68.7 million of senior and mezzanine financing in support of the acquisition of a multifamily portfolio that includes properties in the Chicago and Cincinnati suburbs.

Torchlight’s previous debt opportunity fund, a $765 million 2008 fund, had generated 9.7 percent internal rate of return and 1.23x equity multiple as of 30 June, according to LACERS documents.