Och-Ziff Capital Management is reportedly raising funds for a high-yield commercial real estate debt fund that will target a range of distressed and alternative assets.
The hedge fund, through Och-Ziff Real Estate, is looking to raise $800m for the closed-end fund, targeting returns north of 10% and up to $13%, said a source familiar with the plans. The fund will make debt investments on assets as diverse as distressed land, casinos and senior housing.
The $47.9bn hedge fund currently manages multi-strategy funds, credit funds, collateralized loan obligations (CLOs), real estate funds, equity funds and other alternative investment vehicles.
US state pension funds and foreign governments seeking reliable investments have been among the hedge fund’s most active investors. But the new fund marks its first high-yield real estate debt fund and thus could be viewed as being inherently riskier than previous funds.
Last month the hedge fund said it managed $10.3bn in its credit fund business, noting that $1.5bn had been invested into its real estate fund business last year through Och-Ziff Real Estate Fund 3.
A company spokesperson declined comment.