LCM Partners, an alternative asset manager partially owned by Brookfield Asset Management, is seeking to raise €6bn ($6.5bn) for its new Credit Opportunities 5 fund, which will focus on investing in non-performing loans (NPLs) across Europe.
Since starting its fundraising efforts in June, LCM has already secured €3.3bn of indicative interest from investors, according to Chief Executive Officer Paul Burdell. The fund, which aims to deliver an annual internal rate of return of 15%, will also target performing and rescheduled loans to individuals and small- to mid-sized companies.
The fund will refrain from using leverage when acquiring NPL portfolios, but will use leverage selectively for performing and rescheduled loans, according to Burdell.
LCM plans to invest in loans through forward-flow agreements, where assets are purchased on a recurring basis over a defined period. The firm currently has 27 such agreements with European financial institutions and expects the first close of the fund in March.
LCM is controlled by its founders and management team, including Burdell, with Brookfield holding a 49.9% stake.
