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WASHINGTON, DC-Federal Capital Partners has closed a $230 million private equity fund–FCP Fund I LP–that with some leverage should deliver between $800 million to $900 million of purchasing power to the company. With its successful closure now behind it, this fund will mark the first time Federal Capital Partners ventures into debt and equity investment.

The fund will be targeting both hard assets and paper, FCP cofounder and Partner, Esko Korhonen, tells GlobeSt.com. The assets will be in FCP’s traditional sweet spot of value-add, repositioning plays. “But we also feel there is a tremendous opportunity for lending right now.” Mezzanine capital will be a target–specifically, purchasing such paper. Bridge financing is another probable activity. It is also possible, Korhonen continues, that the fund may delve into providing senior debt.

If the latter happens, FCP can count itself as part of a rapidly thinning group. Mezzanine paper, by contrast, has become a favored investment by many real estate funds because of the risk-adjusted returns it can now offer.

The most likely scenario is that the fund will buy notes and provide bridge financing, he says. “But the beauty of this fund is that we have the flexibility and discretion to go after whatever we think is the best opportunity in the market.”

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