Pacific Investment Management Co. has raised more than $800 million in recent weeks for a new fund that will invest largely in real estate-oriented assets.
The Newport Beach-based investment giant disclosed in regulatory filings this month that it’s begun selling interests in a private equity fund designed to buy securities tied to commercial and residential mortgage assets, loans and other debt, primarily in the U.S. and Europe.
It’s the third PIMCO fund under the BRAVO banner, which stands for Bank Recapitalization and Value Opportunities.
The first BRAVO fund, which was launched about five years ago, raised $2.4 billion. The private placement was described as an “opportunistic residential and commercial credit strategy seeking to capitalize on the continued deleveraging and re-regulation of the financial system,” according to company literature.
The second, which kicked off in 2014, raised an additional $5.5 billion and targeted a similar investment strategy.
The two funds’ investors primarily were institutions, such as pension funds and endowments, which made minimum investments of $500,000.
Fresno’s View
They “have been quite successful delivering a net 14% return,” noted a report this year by the City of Fresno Retirement Systems, which in June committed to the third BRAVO fund as part of a $95 million investment in a variety of PIMCO-managed offerings.
“The opportunity set still appears to be attractive,” the report said.
Filings made this month with the Securities and Exchange Commission show PIMCO has raised a little more than $818 million for the new fund since it opened it in mid-November.
The investment firm hasn’t disclosed its target raise total, and executives running the fund could not be reached.
Regulatory documents show the fund will continue to raise capital over the next year. It should take well over a year for PIMCO to deploy the money.
Bravo III will invest in properties with a five-to-eight year hold, according to the Fresno pension fund’s report, “primarily in real estate oriented securities on a global basis. The securities would be significantly diversified on a global basis across public and private equity and debt securities.”
Prior investments by the first two BRAVO funds included a 16-building portfolio in Sunnyvale, an office tower in Houston, and a sizable stake in Poland’s largest listed real estate and development company, Echo Investment. Investments also included a number of nonperforming loans and other distressed real estate assets.
No Orange County properties are known to have been acquired through the funds, though PIMCO has invested in other area real estate properties over the past year, most prominently among them the Intersect office campus in Irvine.
The airport-area campus was bought last year in a venture with the Newport Beach office of Hines Interests LP in a deal reported to be $121.5 million (see related story, page 1).
Branching Out
The new fund continues PIMCO’s effort to branch into other types of investment strategies, a move expected to increase under the guidance of new Chief Executive Emmanuel Roman, who took over the top spot at the company in November.
Roman, former head of London-based Man Group PLC and a longtime Goldman Sachs executive, “intends to push (PIMCO) deeper into hedge funds, real-estate assets and other alternative investments,” noted a recent Wall Street Journal profile.
The unit of German insurer Allianz SE has about $1.55 trillion in assets under management, down from about $2 trillion around the time of the 2014 departure of firm co-founder Bill Gross. Alternative investments, including the BRAVO funds and other hedge funds and private strategies, now comprise about $26 billion of that, according to Wall Street Journal estimates.
The PIMCO Total Return Bond Fund was eclipsed last month by the Metropolitan West Total Return Bond Fund, losing its longtime status as the world’s largest actively managed bond fund, according to the Wall Street Journal. The paper said MetWest has gotten the most inflows from former PIMCO investors who abandoned the firm after Gross’ departure for Janus Capital Group Inc.
