Get To Know Fairbridge

More than five years post-launch and over $800M origination in bridge loans, with no principal losses to date, and five real estate private credit investment vehicles, Fairbridge Asset Management has made its mark with investors looking for stable, uncorrelated returns and real estate developers seeking short-term mortgage bridge loans. And yet, we still occasionally hear: “The Fairbridge name sounds familiar. Can you tell me more?”

We get it. It’s a crowded, fractured market. How do you tell what’s a real thing – and how can you tell if it’s right for you.

To answer these questions and others, here’s a quick introduction so you can get to know Fairbridge – whether you want to become an investor or a borrower.

How and why did Fairbridge get started?

In 2018, Brian Walter, John Lettera, ESQ, and Steven Wissak – with extensive industry experience across finance, real estate, law, loan structuring, and portfolio management – identified a void in the asset-based lending market. While there are many bridge lenders, there were not many scaled bridge lenders. Together, they established Fairbridge Asset Management to underwrite and fund high-yield short-term bridge loans for real-estate developers across the US and to bring an institutional approach to this very fragmented industry.

The three principals built out a robust team of real estate pros to ensure every aspect of Fairbridge’s operations on both the lending and investment side met their high professional standards.

The launch of Fairbridge delivered a relationship approach to real estate developers and provided a reliable source of short-term capital to take their projects from acquisition to income-producing property.

In turn, Fairbridge gives family offices, high net-worth individuals and accredited investors an opportunity to participate in a typically stable form of private credit investment. With loan-to-value ratios in the 40-70% range, and interest-rates in the 10-15% range, the loans are designed to deliver attractive, risk-adjusted returns with limited volatility.

What makes Fairbridge’s approach different?

Fairbridge brings an institutional approach to a segment of real estate lending that is fragmented and inefficient. Fairbridge’s primary focus is 12-to-36-month loans for 1-to-4 family residential projects, typically geared to workforce housing.

Prior to Fairbridge entering the market, real estate developers had three choices for bridge loans. Let’s look at each from largest to smallest lender. The multi-billion-dollar banks have the attitude that only the big should apply. They have little interest in funding mid-market projects. So, the reality is that the big bank avenue is for larger players. As a result, regional banks are the traditional mainstay of bridge loans. However, many require borrowers to leave large amounts of uninsured deposits at the bank in exchange for a loan. In addition, like most banks, their process is slow, taking weeks when developers need their money within days. What’s more, no one could have fully predicted the current volatility and tightening of credit from regional banks. (Here, Fairbridge’s positioning has proved especially fortuitous.) Developers’ last remaining option has been generally limited to private credit funds, many of whom are two or three person shops who lack their own dedicated capital and a sophisticated institutional approach.

Fairbridge takes a different tack. Fairbridge brings reliability, flexibility to customize loans, experience, and speed. We specialize in residential multi-unit real estate where there is a growing demand for projects and a constant need of financing. Our team’s deep knowledge enables us to identify attractive projects across the US. We’re conservative in our use of leverage and are typically the first lien holder.

And unlike small private lenders who lack transparency, Fairbridge has a proven track record of audited financials, a seasoned credit committee, and a focus on repeat borrowers who have demonstrated a history of success. Our institutional fee structure is notable for its strong alignment of incentives.

What types of investment vehicles does Fairbridge offer?

Fairbridge has built a range of investment products to meet investors’ preferences for open versus closed, domestic versus offshore, diversified versus customized portfolio.

● Open-end Fund: Our flagship fund, the Open-end Fund (i.e., no maturity date) is a private REIT structure designed to provide yield stable, uncorrelated returns and maximize tax efficiencies. The Fund has an annualized net return of 11.72% (inception through 1Q 2024)1 and offers the opportunity for immediate investment.

● Closed-end Fund: With goals similar to our Open-end Fund, our Closed-end Fund has a defined maturity date. Our current Closed-end Fund is fully subscribed and matures in November 2028.

● Offshore Fund: Fairbridge Partners Cayman L.P. open-ended evergreen fund is a feeder fund designed for non-US investors or US tax-exempt investors and is structured for consistent, risk-adjusted returns and maximum tax efficiency.

● Co-investment: Our co-investment strategy allows investors to invest in individual loans alongside Fairbridge. We take a proactive approach with our partners to continuously source and access co-investment opportunities in real estate private credit.

● Separately managed account (SMA): Creating an SMA with Fairbridge allows investors to access our firm’s origination capabilities and to structure a customized portfolio of mortgage loans with characteristics, collateral, and geographical locations that suit the investor’s investment parameters.

How can I get to know even more about Fairbridge Asset Management?

At Fairbridge, investors and borrowers have a direct line to the people making the investment and lending decisions. Along with our quarterly newsletters and monthly emails, we welcome questions from private market investors during quarterly conference calls, as well as in-depth discussions about our portfolios. Our managers also keep their doors open to investors for in-office discussions.

Fairbridge’s boutique model means we’re accessible, and our foundation is based on transparency. We invite investors and borrowers to reach out to us and to

visit fairbridgellc.com.