October 12, 2017
New York-based KKR held a final close on a $1.1-billion real estate debt fund that seeks to invest in junior pieces of CMBS. KKR Real Estate Credit Opportunity Partners (RECOP) focuses primarily on investing in newly-issued CMBS B-Pieces as an eligible third party purchaser under the December 2016 risk retention regulations.
KKR’s Matt Salem says, “With more than $50 billion annual conduit CMBS issuance, and a limited universe of B-piece buyers, there is a growing need for capital to satisfy the new regulatory framework.”
Earlier this year, KKR completed the first CMBS transaction subject to risk retention. Since then, it has closed on six additional transactions representing a face amount of $517 million and roughly $225 million of aggregated invested equity, making it the most active CMBS B-Piece buyer of third party risk retention structures.
RECOP exceeded its target capital raise and received strong backing from a diverse group of global investors.
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