400 Capital Management Closes Fourth Investment Fund With $1.39B in Commitments
The New York-based alternative credit manager had previously raised three other funds since 2017 that secured a combined $1.2 billion in capital
By Brian Pascus March 5, 2025 2:11 pm
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A New York-based alternative credit manager has blown past its previous fundraising totals by closing a new $1.39 billion fund devoted to investing in the residential real estate space, commercial real estate, and other asset-based securities.
400 Capital Management, an investment firm with $7.4 billion in assets under management, announced Tuesday that it closed its fourth private credit fund, Asset Based Term Fund IV, blowing past its $1 billion goal by more than $380 million.
The fund launched in December 2023 and closed this month. It will carry a three-year investing window.
Chris Schiavone, head of private credit strategies at 400 Capital Management, told CO the fund is strictly a credit vehicle targeting “high-yield, asset-backed finance.” Schiavone said the major fields of play will be residential housing markets — anything from mortgage credit investments to homebuilder finance and construction lending — to commercial real estate lending in distressed asset classes, as well as broader asset-backed finance.
He added that 80 percent of the fund is sourced from U.S. pension and endowment clients, and that many investors were attracted to the fund’s diversification strategy.
“What really picked up the oversubscription and adoption rate was the opportunistic nature of the investment program not being penned into any one particular sector, it being billed as a multisector approach,” said Schiavone.
“We retain the ability within the flexibility of that mandate to make tactical rotations on behalf of the client, rather than investing in a specialized fund for a particular real estate class or sector,” he added.
The is the fourth asset-based term fund that 400 Capital Management has launched since 2017. The series of funds had zero commercial real estate exposure prior to COVID, but has decided to lean into the sector much more in recent years.
Fund I, launched in 2017, secured $206 million in capital commitments and invested zero percent into CRE; Fund II, launched in 2019, secured $430 million in commitments and invested 10 percent in CRE; while Fund III, launched in 2021, secured $580 million in capital and invested 30 percent into CRE, according to Schiavone.
“We want to leave investors with confidence they will have a diversified portfolio, but the ability to extract exceptional returns is somewhat dependent on our ability to be flexible on opportunities as they come through,” he said. “As a practical matter, we’ve never been more than 50 percent in any one particular sector.”
Schiavone emphasized that this latest fund will be a “solutions-based capital provider” and that he expects to have conversations around the “highest pain points” within core markets, including office and the dearth of development-related capital in residential and commercial real estate markets.
“We’re not necessarily targeting office, but it’s certainly an asset class where we have the greatest degree of influence over the process of price negotiations,” he said.
400 Capital Management is headquartered in Midtown Manhattan. The firm started in 2008 and currently has 73 employees.
Brian Pascus can be reached at bpascus@commericalobserver.com
