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March 21, 2013 at 10:07 AM
Direct investments in European real estate loans—are they crazy? Like a fox, apparently.
Reuters reports that the head of PIMCO‘s mortgage credit portfolio management team says the firm is targeting direct commercial real estate investments and nonsecuritized loans, which carry greater risk but higher return potential.
The news service notes that PIMCO’s Dan Ivascyn believes the move by banks around the world to offload some of their debt has created opportunity to buy up unrated loans.
“Some of the more complex, illiquid areas are where we still think there is considerable value,” Ivascyn said.
The hunt for yield and stable cash-flow streams have translated into strong returns on everything from “junk” bonds to commercial mortgage-backed securities.
