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Canyon Partners Closes a $450 Million Real Estate Debt Fund

Updated on

Canyon Partners Closes a $450 Million Real Estate Debt Fund

Las Vegas Housing

Canyon Partners LLC has closed a real estate debt fund with more than $450 million in commitments, the Los Angeles-based hedge fund announced Thursday.

The property fund will focus on originating senior and subordinate debt in markets across the U.S., Canyon said in a statement. “In today’s market, we are seeing opportunities to lend on high-quality real estate projects at particularly favorable risk/reward profiles,” Josh Friedman, co-founder of Canyon, said.

Canyon, which has $24 billion in assets under management and more than 220 employees around the world, said it has supported the financing of some $9 billion in real estate assets through debt investments since its founding in 1990. Its real estate arm, led by Robin Potts and Maria Stamolis, will oversee the new debt fund. Among other activities, Canyon Partners Real Estate originated a $102.3 million bridge loan for luxury rental towers in Miami early this year and, in late 2017, a $63.5 million construction loan for a condo building in Portland, Oregon.

The firm’s real estate debt strategy “is a reflection of the structural opportunity present in the market today for alternative lenders and a natural extension of our long track record in the asset class,” Canyon co-founder Mitch Julis said in the statement.

Friedman and Julis formed Canyon after graduating with both law and business school degrees from Harvard University in the early 1980s. Those were the heady years for junk bonds, and the two did stints at Drexel Burnham Lambert Inc., the defunct investment bank where high-yield impresario Michael Milken made his name. There, they sharpened their debt-investing skills.

Canyon’s Value Realization Fund gained 13.1 percent last year, and its Balanced Fund 15.2 percent, Bloomberg reported in January.

(Updates with comment from co-founder in fourth paragraph. An earlier version of this story corrected the purpose of the Miami loan.)