Ed Shugrue, the former chief financial officer of Capital Trust, has launched his own firm, ES Capital Management, and is set to raise capital for a fund that will invest in high-yield real estate debt, according to BW sister publication Real Estate Finance & Investment. Shugrue, a veteran of the commercial real estate industry, said he is hoping to raise $150-300 million in the next six to 12 months for the as yet unnamed fund. With leverage, the fund will have up to $1 billion in buying power will target high-yield commercial real estate debt, including mezzanine debt, commercial mortgage-backed securities, B-notes, preferred equity, listed debt securities and collateralized debt obligations. Shugrue is talking with potential investors but acknowledges that current geopolitical uncertainties might prolong the capital raising period. "It's not an easy time in the world right now," he said.
With its broad focus on several different areas of high-yield real estate debt, ES Capital Management will have a unique twist. "All of the current mezzanine funds were created to focus on individual tranches within the capital structure. There is no one vehicle that will invest up and down the credit spectrum," Shugrue said.