Oval Capital Management eyes distressed real estate

New York-based Oval Capital Management is in market with a new distressed real estate and non-performing loans strategy. The firm looks for nonperforming mortgage notes backed by commercial and residential real estate

Oval Capital managing partner Oleg Langbort tells Opalesque New Managers that the firm is targeting $25-50 million for its first fund and has already done approximately $8 million in transactions over the past six years.

The management team, which includes Langbort and managing director Igor Vidrevich has experience with real estate debt investing, property management and renovation as well as buying and selling properties. Vidrevich joined the firm from Morgan Stanley, where he worked in the Securitized Products Group. Langbort previously worked in alternative investments for Banco Santander.

Oval takes a high touch approach buying nonperforming debt and rehabilitating the underlying asset. In some cases, that could mean fully renovating a property in order to sell at a profit. The portfolio can hold a mix of commercial and residential real estate with the proportion of each varying based on the market environment. "For most private equity and hedge funds, owning the asset would be their worst nightmare. We think that you can't manage from afar, often our best case scenario is to own the asset and be hands-on," Langbort says

Oval's typical deal size ranges from $3-10 million and the management team works to get capital back to investors within 24 months. Langbort says it is key for investors to understand that the strategy is opportunistic in nature and isn't a long lock-up real estate fund. The 24-month timeline provides a similar profile to bridge financing funds, which usually return capital back to investors within 1-3 years. S......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.