Cerberus Starts Commercial Mortgage Securities Hedge FundKelly Bit
Cerberus Capital Management LP, the $20 billion New York-based firm focused on distressed assets, started a fund to invest in commercial mortgage debt, according to a letter to investors obtained by Bloomberg News.
The Cerberus CMBS Opportunities Fund, which began Oct. 7, can bet on and against senior and subordinated commercial mortgage-backed securities, interest-only securities, commercial real estate collateralized-debt obligations and mezzanine loans, according to the letter.
The “new issue market has grown steadily since 2009 with 2013 issuance ahead of last year’s pace,” the firm wrote.
CMBS issuance is poised to double to $70 billion in 2013, according to Credit Suisse Group AG. Moody’s Investors Service is boosting the level of credit protection required to achieve investment-grade rankings on newly issued commercial-mortgage bonds as loans get risker.
The fund’s investment team is composed of Scott Stelzer, head of commercial mortgage trading; Kyle Schneider, managing director; Ross Feldman, senior vice president; and Matthew Waldenberg, assistant vice president, who all started at Cerberus in 2008, according to the letter.
Peter Duda, a spokesman for Cerberus with Weber Shandwick, declined to comment on the letter.