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CIM Group Launches Interval Fund

May 7, 2020

CIM Group Launches Interval Fund

May 7, 2020 | Luke Schmidt & James Sprow | Blue Vault

CIM Group has launched a new closed-end interval fund, CIM Real Assets & Credit Fund (“CIMRAC”).  The Fund became effective on April 30, 2020, and seeks to raise up to $1 billion to primarily invest in a mix of real assets and credit-related assets.  The Fund’s investment objective is to generate current income through cash distributions and preserve shareholders’ capital across various market cycles, with a secondary objective of capital appreciation.

The real assets may consist of direct real estate and infrastructure held through one or more wholly-owned REIT subsidiaries, publicly-traded REITs and nonaffiliated private REITs, real estate mortgages, CMBS, and infrastructure assets.  Credit-related assets may consist of investments in floating and fixed-rate loans, broadly syndicated senior secured corporate loans, investments in the debt and equity tranches of CLOs, and opportunistic credit investments.

“We believe that CIM RACR will benefit from CIM’s combined real assets, credit, and transaction experience, along with our deal-sourcing capabilities, leveraging the extensive expertise across our organization,” said David Thompson, Chief Executive Officer of the Fund. “We are targeting the construction of a balanced portfolio of real assets and corporate credit assets, allowing investors the opportunity to leverage the potential benefits of both asset classes with a goal of providing income and capital preservation, without the double fees associated with typical real estate-focused interval funds.”

CIM Capital IC Management, LLC (“Advisor”), a wholly-owned subsidiary of CIM Group, LLC, will act as the Fund’s investment adviser.  CIM Capital SA Management, LLC, a wholly-owned subsidiary of CIM Group and an affiliate of the Advisor, will act as a sub-adviser responsible for identifying and sourcing investment opportunities with respect to investments in real assets.  OFS Capital Management, LLC, a wholly-owned subsidiary of Orchard First Source Asset Management, will act as a sub-adviser responsible for identifying and sourcing credit-related investments.  ALPS Distributors, Inc. will serve as the principal underwriter and distributor of the fund.

CIMRAC is available in four share classes:  Class C (RACRX), Class A (ARACX), Class I (IRACX), and Class L (LRACX).  Class C shares are initially priced at $25.00 with no upfront sales load, a 0.75% distribution fee, and a 0.25% servicing fee.  Class A shares are initially priced at $26.53 with a 5.75% upfront sales load and a 0.25% servicing fee.  Class L shares are initially priced at $26.11 with a 4.25% upfront sales load, a 0.25% distribution fee, and a 0.25% servicing fee.  Class I shares are initially priced at $25.00 with no upfront sales load and no distribution or servicing fees.  Each share class includes a 1.50% annual management fee.

The board of directors of the Fund declared a quarterly cash dividend of $0.125 per share of common stock for May and June of 2020, representing an annualized distribution rate of 6.00%.  The dividends will be paid on June 3, 2020, to stockholders of record at the close of business on June 1, 2020, and on July 6, 2020, to stockholders of record at the close of business on July 1, 2020.  For shares issued during the quarter, the dividend will be prorated from the date of issuance.

CIM is a community-focused real estate and infrastructure owner, operator, lender, and developer. Since 1994, CIM has managed projects in communities across the Americas on behalf of its own account and its partners, co-investors, and shareholders. CIM has $29.7 billion in assets with offerings to institutional and retail partners across the risk-return spectrum, as of December 31, 2019. 

CIM’s continuously offered public, non-listed REIT, CIM Income NAV, Inc., focuses on retail, office and industrial assets situated in strategic locations and leased to tenants on long-term net leases.  As of December 31, 2019, the REIT had a portfolio of 128 properties in 34 states, 98.6% occupied with a weighted average lease term of 10.7 years.  The REIT has recently changed its NAV calculations from daily to monthly and shares may be repurchased monthly.

Sources:  SEC, CIM Group

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