JPMorgan to Raise Up to $3 Billion for Real Estate Credit Fund

(Bloomberg) -- JPMorgan Chase & Co.’s asset-management arm has launched a new fund to take advantage of dislocations in the public and private real estate credit markets, according to a person familiar with the matter.

JPMorgan Asset Management is looking to raise $2 billion to $3 billion from institutional investors for the Real Estate Credit Opportunity Fund, according to the person, who asked not to be identified because the information is private.

The vehicle will target 10% to 15% net returns investing in bonds and pools of loans tied to commercial real estate, according to documents viewed by Bloomberg. The fund will invest in strategies including structured credit, rescue loan origination and both performing and non-performing loan acquisition, the documents said.

A JPMorgan Asset Management spokesman declined to comment.

The asset management division’s new real estate fund is part of its plan to raise as much as $10 billion for alternative investments as fallout from the coronavirus pandemic continues to rattle global markets. The group’s priority is lending to companies with high-quality assets as more cash-hungry borrowers need funding to weather the pandemic.

JPMorgan sourced over $100 billion of real estate equity and debt transactions in 2019, with $28 billion underwritten.

Recession fears due to the spread of Covid-19 are creating opportunities for lenders to snap up private loans on the cheap and provide financing at more attractive terms. Firms like Goldman Sachs Group Inc.-backed Directed Capital and Arena Investors LP are also looking to capitalize on the dislocation in real estate.

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