Ardent Financial aims to raise at least $300 million of equity for its latest bridge-loan origination vehicle, reflecting the fund manager’s bid to expand opportunistic investments in the wake of the pandemic.

About a month ago, the firm kicked off what’s likely to be a yearlong marketing campaign for Ardent Financial Fund 4. Investors are hearing that Ardent might try to raise as much as $400 million of equity for the new vehicle. With leverage, that would give it roughly $600 million of lending power.

Plans call for closing this month on the first round of equity, totaling $50 million to $100 million. Like its predecessor, the new fund will target middle-market loans tied to construction projects, redevelopments and heavy-transitional properties. However, Fund 4 also will pursue a broader mix of opportunities, putting a greater focus on lower-risk, value-added plays.
Ardent closed last March on the final round of equity for the previous vehicle in the series. With about $180 million of its $213 million of equity deployed so far, Fund 3 is expected to continue originating loans through the end of March.

Some of the equity raised for Fund 4 is likely to come from investors in Fund 2. That $155 million vehicle returned capital on schedule during the second half of last year. The first fund in the series, which had $100 million of equity, was unwound as planned in the fall of 2018.

Ardent intends to write at least $300 million of bridge loans this year, up from about $250 million last year. Typically offering floating rates and terms of up to three years, it originates mostly senior loans ranging from $5 million to $75 million.

Meanwhile, the firm is on track to exceed its $200 million fund-raising goal for Ardent Strategic Fund 1, which targets debt and equity investments tied to distressed assets and liquidity-strapped property owners. After drumming up $172 million since last spring, it’s set to hold a final close this month on about $215 million of equity.

The strategic fund has deployed about $40 million of equity via two investments so far. The vehicle is focused primarily on purchasing outstanding loans and commercial properties at a discount. It may also invest in single-family homes and lots.

The strategic fund and both bridge-loan vehicles charge a 1.5% management fee against deployed capital and no fees prior to investment. After the preferred return to investors in each bridge-loan fund reaches 8%, the manager is entitled to 20% of additional profits. Once investors in the strategic fund realize a net return of 16%, the manager receives 40% of any additional cashflows.

Managing director Daniel Siegel oversees investments for Ardent Financial, a unit of Atlanta-based Ardent Cos. The fund operator’s management team also includes managing director Michael DeGance, who raises capital and handles investor relations. Managing director Christopher Kelly, who opened the firm’s New York office a year ago, helps identify and structure debt originations as part of his responsibilities for new business and product management.

Commercial Mortgage Alert – January 8, 2021