Cottonwood Raises $1B for Real Estate Credit and Opportunities Fund
Cottonwood Group has raised $1 billion at the final close of a fund that mainly focuses on special situation real estate opportunities. The amount exceeded its initial goal, which was listed by the private equity firm. The Cottonwood Real Estate Special Situations Strategy garnered support from separate accounts and pool-funded vehicles.
The strategy will hone in on real estate credit and what the company refers to as "event-driven" opportunities for equity. Plus, Cottonwood said it will keep an open mind to all property types.
So far, the fund has invested in a variety of asset classes at the initial close, including multifamily, data centers, industrial and mixed-use developments. The properties are located in high-growth markets throughout the nation.
The announcement of the closure comes at a time when Cottonwood Founder and CEO Alexander Shing admits that the fundraising landscape has been challenging. In fact, investment management platform vendor Agora recently noted a report that top CRE firms have seen capital raising plunge by 7.7 percent year-over-year.
"We are extremely appreciative of the trust and support received from our U.S. and global institutional investors, allowing us to reach this important milestone during a period where private equity real estate fundraise is at a decade low," Shing said in a statement.
"This underscores the confidence of our investors in Cottonwood's investment platform that allows us to remain agile during market cycles, invest across the full capital stack, and execute complex development or restructuring when required to unlock value."
Shing added that the company has experience in minimizing risks when market headwinds persist, helping the Los Angeles-based firm maximize returns.
Since 2012, Cottonwood has either advised, invested or been involved with a deal on more than $7 billion worth of gross assets in total. In January, Cottonwood originated $284 million in senior bridge financing to Reger Holdings, relating to four Austin, Texas properties, which include retail and multifamily use.
Source: GlobeSt/ALM