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MSD Partners Raises $1.1 Billion for Real Estate Credit Bets

Gillian Tan

(Bloomberg) -- MSD Partners has raised about $1.1 billion for a fund dedicated to bets on structured credit secured by real estate, beating an initial target of $750 million.

The MSD Real Estate Credit Opportunity Fund gathered about $300 million from Michael Dell and his family, as well as MSD employees. The vehicle will make and purchase commercial real estate loans and securities, in addition to structured investments.“

Since launching the fund, we have been investing actively, particularly during the recent market dislocation,” portfolio manager Rob Platek said in a statement, adding that the fund is positioned to tackle opportunities that arise in the current market environment.

MSD Partners was formed in 2009 by partners of MSD Capital, the family office for Dell, the founder of the namesake computer maker. Starting with $400 million of capital two decades ago, the firms collectively manage about $16 billion. Dell is worth about $29 billion, according to the Bloomberg Billionaires Index. Previous wagers by the MSD Partners real estate credit team include buying transferable development rights attached to New York’s Grand Central Terminal and providing financing to One Thousand Museum, a luxury condominium in downtown Miami.

The fund “operates with a broad mandate that allows our team to identify and structure what are, in our view, the best risk-adjusted opportunities,” said Adam Piekarski, one of the fund’s portfolio managers. Jason Kollander, who also oversees the fund, said MSD Partners’ ability to “rapidly address situations with complex financing requirements and offer creative solutions” helps differentiate it.

MSD Capital submitted a financing proposal to TPG RE Finance Trust Inc., Bloomberg reported in April, though a Starwood Capital Group affiliate in May agreed to provide capital to the company.

(Updates with TPG REIT in last paragraph.)

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