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ARE Opportunity Fund Launch

West Palm Beach (HedgeCo.net) – Lee Hetfield has joined ARE Asset Management LLC, a distressed credit and distressed real estate asset management company in Florida, as Portfolio Manager.

Hetfield reports that as of May 30, 2008, ARE Asset Management launched ARE Opportunity Fund, Ltd. (British Virgin Islands). The fund works in purchasing mortgage loans, the strategy is generating returns using both loan modifications negotiated with borrowers to create loan re-performance, as well as loss mitigation techniques.  Re-performing loans are held for income or sold to securitizers or other investors for a gain. 

Loans that cannot re-perform, resulting in “REO” or real estate owned property, are resolved via a property sale or entered into a rental income program.  The fund also opportunistically invests in senior commercial loans backed by improved real estate at low LTV’s (50-65% of 90 day liquidated value, 35%-45% of BPO), through high-yielding originations made by an affiliated commercial loan originator, SeaBreeze Financial.

The investment manager currently has $110 million under management under the strategy as that of the fund, and the results since launch have been encouraging:  For the month of June the BVI fund was up 1.59%, net of expenses, and July looks to be up ~1.5% (early est.).  Prior to the BVI fund launch The Manager has historically managed funds for offshore investors in fixed-term, LLC structures (in the same distressed/credit opportunities strategy).

The team is spearheaded by Jeffrey Kirsch with over 30 years of experience in commercial and residential real estate.  He has managed the ARE group of companies, based in Miami, FL, since their founding in 1996. At ARE, Mr. Kirsch has overseen more than $1 billion in performing and non-performing mortgage transactions and has long-standing relationships with private and public-sector sellers.

Alex Akesson

Editor for HedgeCo.Net
Email: alex@hedgeco.net

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