Los Angeles-based alternative investment firm Thorofare Capital has raised $400m for a new investment vehicle that will write floating-rate senior loans on value-add opportunities.
The program will focus on $5m-$25m senior loans with average durations between two and five years, with rates starting at 5.5% at LTVs up to 75%.
In addition to opportunities across the multifamily, retail, industrial, hospitality, and office asset classes, the money will be used to finance non-performing loan acquisitions, discounted note payoffs, and note portfolios.
The new vehicle comes in addition to the firm’s existing fixed rate funds, which invest primarily in higher-yielding bridge loans, with shorter terms at higher rates. The most recent, Thorofare Asset Based Lending Fund III (Fund III), has raised $200m of a $300m cap.
“Fund III and previous funds provided financing to borrowers who need rapid financing execution to take advantage of opportunistic transactions and the paper generally has higher yields and shorter terms than the new vehicle,” Thorofare CEO Kevin Miller wrote in an email. “The new vehicle is targeted towards borrowers with more value-add transitional business plans that require longer terms, and is offered at lower rates.”
Fund III had its first closing in November and has invested approximately $120m in transactions by making opportunistic senior debt investments between $2m and $25m.
The previous fund, Thorofare Asset Based Lending Fund II, originated approximately $230m in loans and has realized over 65% of invested capital since the end of its investment period in December.
Miller called the new product a “natural extension of our existing platform as borrowers seek to execute more value-add strategies in [a] strengthening capital market.” It has been capped at $400m.
Thorofare, which specializes in commercial real estate bridge loans, has closed at least 90 transactions nationwide totaling $350m of unlevered equity capital since it was founded in 2010.