New Fund Launch: CIM Real Assets & Credit
The CIM Real Assets & Credit Fund(CIM RACR) officially launched on May 4, 2020, when the SEC approved their prospectus. CIM RACR is available in four share classes: C Shares (RACRX), A Shares (ARACX), I Shares (IRACX) and L Shares (LRACX). The minimum investment for Class C, A, and L shares is $2,500, and the minimum investment for Class I Shares is $1,000,000.
CIM Real Assets & Credit Strategy
CIM RACR is implementing a two pronged strategy. The Real assets portion of the strategy includes real estate in urban areas, and infrastructure. The prospectus mentions “qualified communities” the subadviser analyzes and approves for investment. More detail on this process is available on the manager’s website. Within qualified communities they will target thriving urban areas, especially central business districts. Targeted infrastructure investments will include energy and utilities, transportation communication infrastructure, water and waste management. Real asset investments will include both direct investments, and investments in public REITs. The credit portion of the strategy will include both real estate debt and corporate credit. Real estate debt will include both directly originated mortgages, and loans purchased on the secondary market. For corporate credit, the prospectus highlights opportunities in middle market loans. Note that the fund’s sponsor also has a publicly traded BDC, so they should have the ability to source and analyze middle market credit deals.
CIM RACR has a 1.50% management fee. Additionally, it has an incentive fee of 20% over a hurdle of 6.0% per annum, subject to a catch up provision. The management fee is in line with industry averages, based on Interval Fund Tracker’s premium data.
Class C and Class I shares have no sales charge. Class A and Class L shares have sales loads of 5.75% and 4.25%, respectively. Class C shares are the only shares with an early withdrawal charge, which can be up to 1.0% for Class C shares redeemed within one year of purchase. Class A, Class C, and Class L shares all have servicing fees of 0.25%. Class C and Class L shares also have distribution fees of 0.75% and 0.25%, respectively. Class I shares have no servicing fee or distribution fee.
CIM Capital IC Management, LLC (CIM Group) serves as the investment adviser for CIM RACR . The fund will use two different subadvisors, one for real assets investments, and one for credit investments. CIM Group has a total of $29.9 billion in AUM across a variety of strategies, and this is their first interval fund.
Key service providers to the fund include UMB Bank, and DST Systems, which will serve as the primary custodian and transfer agent, respectively. Alps Distributors will serve as co-administrator and distributor.
Skin in the Game
One unique feature of the CIM Real Assets & Credit Fund is management’s skin in the game. CIM along with its affiliates will invest at least $20 million into the fund over time, as the fund raises capital. This will serve to align incentives between management and outside investors.