Morrocroft Special Opportunity Fund II is a closed-end fund of funds focused on US residential real estate debt strategies. The Manager believes disruption in residential mortgage credit markets has resulted in opportunities to earn attractive risk adjusted returns across a broad range of investment styles and strategies. Targeting returns in the mid to high teens, the Fund offers unique exposure to a diversified, long term, high return payout stream uncorrelated to traditional stock or bond investments.
A fund-of-funds is an appropriate vehicle to gain exposure to residential mortgage credit assets:
* The asset class is extremely large (~$11 trillion) and diverse, requiring multiple managers to gain exposure to most asset types and strategies.
* Mortgage credit strategies require specialized expertise for adequate evaluation.
* Size, operational capability, sector specialization and risk profile, among many other factors, make it difficult for a single firm to manage more than one strategy directly.
* Manager sourcing is difficult. The field is fragmented and often executed by firms lacking broad distribution or significant, pre-existing investor relationships
* Operational and analytical infrastructure required for above-average direct investment capability requires significant time (years) and capital ($ millions)