Loan fund exceeds equity goal

Real Estate Alert, June 9, 2004

New York-based RCG Longview has raised $292 million of equity for its latest high-yield-debt fund, exceeding its initial $200 million goal.

The vehicle, RCG Longview II, will write mezzanine and bridge loans, as well as some first mortgages. It will also make preferred-equity investments. The targeted internal rate of return is 13%.

Investors in the fund include the John D. and Catherine T. MacArthur Foundation and North Fork Capital an affiliate of North Fork Bank.

RCG has already invested about $60 million, including a $13 million junior participation in a first mortgage on the Empire Hotel in Manhattan and an $1 l million junior mezzanine loan for Bruckner Plaza, a 499,000-square-foot office/retail property in the Bronx, N.Y.

The fund operator was formed in 1998 under the name Longview Funding by Jeffrey Fell and Jay Anderson of the old-line investment firm Fell Organization, and by John Estrich of mortgage broker Estrich & Co. The company's first fund had $35 million of equity.

Michael Boxer, a partner of money manager Ramius Capital, joined shortly after, adding the "RCG" to the company's name. In 2001, RCG raised $124 million for RCG Longview I, which finished investing last year.