Market updates and sector developments

Faes & Co, an investment firm led by LendInvest founder Christian Faes, has launched its maiden private credit fund focused on the US real estate bridging finance market. The Faes & Co Income Fund intends to capitalise on the firm’s domain knowledge of the short-term mortgage market to provide investors with consistent, superior risk-adjusted returns.

The fund will invest in loans originated by Faes & Co’s own group company, F2 Finance, which was launched earlier this year. The focus will be on funding a diversified portfolio of granular short-term mortgages secured by first mortgages against residential property in the US, with the aim of lending to ‘property entrepreneurs’ that are active in the ‘fix and flip’ market. In due course, the fund intends to securitise the assets.

Faes has almost two decades of experience in the real estate bridging finance sector, operating in Australia, the UK, Ireland and now the US. He has been managing investment funds in the sector for the last 14 years.

In the US, the short-term mortgage market was recently estimated to be as large as US$68bn a year in annual originations. “The US real estate bridging finance market has undergone a recent period of disruption, where traditional institutional funders have significantly slowed their appetite for a variety of reasons - from the securitisation market being ‘less open’, to regional banks that have had a flight of deposits post the SVB crisis,” comments Faes. “The asset class now presents a very interesting and unique opportunity for investors. It is also a very large and liquid market for building a diversified pool of asset-backed loans that provide a superior risk-adjusted return for investors.”

The Faes & Co Income Fund is open-ended and available to accredited investors in the US, with a Cayman Islands feeder fund available for offshore investors. The fund is administered by Socium, with CohnReznick appointed as auditor.