Inside CIM Real Assets & Credit Fund (RACR)
What happens when real estate, CLOs, CMBS, leveraged loans, repos, and derivatives all end up in the same interval fund?
Imagine a poorly-lit Chinatown shop crammed with everything from $5 knock-off Crocs to samurai swords of questionable origin, and jade-inlaid furniture with price stickers in the six figures. Every shelf is packed, but nothing is related. And you're not entirely sure how the owner stays in business.
That's what reading CIM Real Assets & Credit Fund's schedule of investments felt like.
Most interval funds own one thing. Private credit funds own loans. Real estate funds own buildings. Infrastructure funds own… I dunno, some cables. RACR apparently looked at that concept and said, “Why choose?”
The fund is not big by institutional standards ($237.7M in net assets), but it comes with a lot of different things in one small package. The portfolio is:
part direct real estate,
part CLO debt,
part CLO equity,
part leveraged loans, sprinkled with common stocks for good measure,
and held in piece with derivatives and financing agreements. Plus unitranche loans and, of course, some PIK. (I am not kidding)
Anywho, lack of diversification is not this fund’s problem.
The problem is that nearly every major asset class in the portfolio is financed with leverage, derivatives, or repos, yet shareholders have earned remarkably little for taking on all that complexity.
🔎 It is my hope that today’s case study inspires you to start looking at the schedule of investments. Closely. And reading the fine print on how things are financed. Also closely.
If I haven’t yet turned you into someone who compulsively reads schedules of investments and footnotes, I’m clearly not doing my job (or you are new here).
Disclosure: This case study is provided for educational and informational purposes only and should not be construed as investment, legal, tax, or financial advice. The views expressed are solely those of the author. All examples are illustrative in nature and not guarantees of future outcomes. Readers should conduct their own independent research and consult with qualified professionals before making any investment or financial decisions.
What’s in the fund
RACR is a non-diversified, closed-end interval fund registered under the 1940 Act, continuously offering shares across four classes (I, A, C, and L). It launched May 4, 2020. The fund targets a long-term allocation of 30% real estate equity and 70% credit, split roughly evenly between real estate and corporate credit.
As of March 31, 2026:
Cost of investments: ~$350 million.
Current fair value: ~$314 million.
In other words: the fund is sitting on approximately $36 million of unrealized losses (or 10.3% of cost):
Now let’s look at the more interesting thing: what’s inside and how it’s financed