ABL Life Insurance Co. Ltd., a South Korean arm of China’s Anbang Insurnce Group, has decided to commit 50 billion won ($44 million) to Madison Realty Capital (MRC) Debt Fund IV which is raising $1.1 billion in capital commitments, according to a South Korean news report.
With the commitment, ABL Life becomes the first Asian limited partner for the new fund, Paxnet News reported on April 15, citing investment banking sources.
ABL Life declined to comment.
Madison Realty Capital, a real estate-focused private equity firm, announced the final closing of the $1.1 billion debt fund on April 16, saying that the latest fund provides the New York-based firm with over $4.5 billion of capacity to address the needs of its clients.
MRC Debt Fund IV originates and acquires commercial mortgage loans, mezzanine loans and preferred equity interests.
It targets annual returns of 16% and excluding performance fees, investors are expected to secure around 14% returns a year, the report added.
The debt fund allocates about two thirds of its committed capital to short-term, senior debts secured on real estate in New York state with an average loan-to-value ratio of below 60%.
It provides loans with a one to two-year maturity against assets which are difficult to refinance through large financial institutions, according to the report.
Since founded in 2004, MRC has invested more than $10 billion in multifamily, retail, office, industrial and hotel sectors.
The firm’s previous real estate debt investment vehicle MRC Debt Fund III raised a total of $695 million in capital commitments in 2016.
ABL Insurance, formerly known as Allianz Life Insurance Korea, was acquired by Anbang Insurance Group in 2016.
<Edited by Yeonhee Kim>
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