Alternative asset manager Balbec Capital LP has raised nearly a billion dollars for its latest debt fund as commercial real estate increasingly turns to private credit.

Balbec reached its first closing with $930M in commitments for its IGCF-VII fund, according to a U.S. Securities and Exchange Commission filing. The fund will target commercial and residential mortgage debt across the U.S. and western Europe, Bloomberg reported.

Its investments include performing and nonperforming residential mortgage loans, mortgage servicing rights, and commercial mortgage and bridge loans.

The fund is anticipated to be even larger than previous ones. Balbec has raised five prior funds, with its most recent bringing in $1.47B.

Over the past several months, Balbec has been expanding its lending activity.

In March, the firm announced its first commercial real estate collateralized loan obligation, a $615M transaction backed by senior floating-rate commercial mortgage loans, Green Street News reported. The majority of the underlying assets consisted of apartment loans.

In June, Balbec acquired London-based Funding 365 Lending, expanding its European real estate exposure.

Balbec has invested in more than 20 countries, with roughly $8B in assets under management. The firm has also issued 107 securitizations as of June 30.

Balbec is seeing opportunities in the space as traditional lenders grapple with pandemic-era balance sheet issues and are backpedaling on new deals. Private credit lending has taken off in recent years in the commercial real estate market, with the second half of 2025 seeing roughly $1.4T in private credit loans.

Last year, private equity firm Heitman raised $806M for its Heitman Real Estate Debt Partners III fund to provide "creative financing solutions to high-quality sponsors."