KKR has held a final closing for its KKR Real Estate Credit Opportunity Partners II (RECOP II) with $950 million in committed capital. The fund will continue KKR’s strategy focused on generating attractive risk-adjusted returns, primarily through the purchase of junior tranches of new-issue conduit commercial mortgage–backed securities.
RECOP II, like its predecessor, RECOP I, focuses primarily on investing in newly issued conduit CMBS B-pieces as an eligible third-party purchaser subject to the risk retention regulations that took effect in December 2016. Additionally, it has the ability to purchase non-risk retention conduit CMBS and other real estate securities.
RECOP II has closed on nine risk retention transactions, and RECOP I and RECOP II have completed a combined 36 closed investments through June 2020, making KKR the most active CMBS B-piece buyer of third-party risk retention structures since risk retention regulations took effect.
