Investcorp has established a real estate credit fund to acquire up to $1 billion in U.S. commercial real estate. The funding was raised from Investcorp, its clients, and a sovereign wealth fund investor from the Persian Gulf. Whole loans, mezzanine loans, commercial mortgage-backed securities are the credit opportunities on which the fund will focus.

“As the market transitions, opportunities emerge for Investcorp’s debt investment business. We have been an active investor in the U.S. real estate market for more than 25 years, and as such are well-positioned to draw upon our extensive relationships within the lending community to seize on opportunities to grow our debt business,” notes John Fraser, co-head of Investcorp’s real estate group.

The fund has already acquired several mezzanine loans backed by hotel properties valued at about $210 million. Two mezzanine loans were acquired from a major Wall Street investment bank. One of the loans is backed by a portfolio of nine hotels in eight states. The second loan is backed by a Houston hotel property.

Four mezzanine loans also were purchased from a major commercial bank. These loans are backed by two hotels located in New York City’s Times Square. The acquisitions were made with capital from this credit fund as well as additional capital from Investcorp’s first mezzanine fund.