Zenzic Real Estate Opportunistic Credit Fund

The Zenzic Real Estate Credit Opportunities Fund (“ZRECO”) provides short and medium duration credit to high quality real estate borrowers across the UK and European lower mid-market. We lend across all major real estate sectors.

We provide highly structured real estate credit to:

The portfolio is diversified by sector and geography and focused on income yield and downside protection.

Download the Fund Launch Press Release

Why Zenzic?

Differentiated Strategy

We have developed an all-weather credit strategy capable of delivering strong risk adjusted returns across the business cycle and heightened returns in periods of market turbulence.

Lower Mid-Market Expertise

We have over 14 years of exclusive focus in the lower middle market building networks and direct, long-term relationships with real estate groups that other institutions are unable to access.

Structuring Excellence

Our team has structured over 200 loans totalling in excess of $7bn and have lent across 10 European countries, covering every major real estate sub sector.

End-to-End Lending

Our senior investment team is cycle tested with a skill set that goes beyond just credit to cover legal, insolvency and asset management experience. Our credits are actively managed to drive business plan execution, loan performance and to protect capital.

Investment Approach

Our investment approach is driven by the following core principles that permeate our thinking, our investments and the DNA of our firm.

The Upside of Downside Protection

We believe that entry price, or creating value through the buy, is the most critical factor in limiting risk. Accordingly, investing on a value driven basis – and the margin of safety it creates – is at the centre of our investment process. We seek convexity in all our investments where we can create a day 1 margin of safety through subordinated value while enjoying upside participation.

The Road Less Travelled

We believe that the best investors should be prepared and capable of looking where value is, not where they would like it to be, and the deepest mispricings are rarely the most visible. Accordingly, a key part of our investment process is identifying market inefficiencies caused by cyclical swings, industry disruption, capital scarcity, a specific transaction dynamic or wider dislocations.

Size Matters

Our investment focus is on lower middle-market opportunities, where financing options are more limited, but a wealth of desirable transactions exist. Size can genuinely be a disadvantage in some cases, particularly when it comes to defining your opportunity set. As one legendary opportunistic investor put it: “While it helps to have extraordinary size to be an NBA player, there are a lot of big lugs who aren’t any good and can’t make it in the NBA despite their size. It’s also how skilfully you play!”

Creativity

The herd mentality nearly always prevails in financial markets. It is safer to be in the pack even when the consensus is shown to be wrong. Creativity therefore requires an insistence on independent thought, an acceptance of uncertainty and to act with boldness when an opportunity presents itself.

Structure defines strategy

Special opportunities in private markets are a tabula rasa for investment firms. The ability to structure – defined in our view as the application of legal, financial and commercial knowledge to mitigate risk – is a hallmark of the firm and needs to be bespoke to each transaction. We utilise the full panoply of protections available to both creditors and equity-holders, typically coupled with novel additional structural enhancements to elevate liquidity and/or mitigate jurisdictional risk.

Patience

We invest via permanent capital structures that avoid liquidity pressures that can drive either short-termism or value destruction through necessitated monetisation of positions. Being able to wait and to avoid being either a forced buyer or seller is in our view a material advantage in today’s investment universe.

Investment Focus

Growth

Zenzic takes a strategic equity stake alongside exceptional management teams in differentiated real estate platforms.

Zenzic provides capital - typically on a preferred equity basis - and gives management support to assist the business to scale and exploit the market opportunity to its full potential.
Sectors: Selected, based on Zenzic view of relative sector strength and outlook
Investment structure: JV / Preferred Equity

Loan Term

24 - 0 months

Ticket Size

£ 0 m+

Liquidity

Providing solution-based capital for liquidity requirements caused by factors unrelated to risk including:

Transaction complexity, inc. accelerated transaction timetable, non-vanilla collateral package
Retrenchment of traditional capital providers
Strong balance sheet / weaker cash flow scenarios
Relative nascence of sector; sector agnostic
Investment Structure: Senior and Junior Secured facilities