Cameron Stephens Mortgage Capital Ltd., has launched the Western Canada High Yield Mortgage Fund, with an initial commitment of $70 million, which it intends to begin quickly investing in a “strong pipeline” of potential deals.

The fund will focus on secured lending across Western Canada, with an initial focus on Alberta and British Columbia.

The fund includes $35 million in commitments from Western Canadian real estate family offices, plus a $35-million allocation from Cameron Stephens’ Bay Street High Yield Fund. 

It is a key pillar in Toronto-based Cameron Stephens’ ongoing expansion strategy in Western Canada, where the firm has grown to over $550 million in assets under administration over the past four years.

“The Western Canada High Yield Mortgage Fund builds on the long-term success of our existing Bay Street High Yield Fund,” said Steve Cameron, president and chief operating officer, in Wednesday’s announcement. “This new vehicle allows us to deliver capital faster and with more flexibility in Western Canada, while drawing on deep local insight from our newly formed Western Canada Investment Committee — comprised of some of the most sophisticated real estate family offices in the region.”

Fund modelled after existing Bay Street fund

The fund is modelled after its Ontario-based flagship Bay Street High Yield Fund launched in 2004, which the firm says has delivered net annualized returns of 11.4 per cent since inception.

Western Canada fund investors will gain access to a range of mortgage investment opportunities alongside the Bay Street High Yield Fund, delivering a portfolio designed to offer diversification across location, mortgage type and asset class.

“While the fund is designed to be diversified across commercial real estate asset classes, we are particularly focused on income-producing properties and land with near-term development potential in Alberta and British Columbia,” Phil Housley, Cameron Stephens’ chief of staff, wrote in an email reply to questions from RENX. "In today’s environment, we’re seeing strong borrower demand for flexible, non-bank financing on light industrial, multifamily rental and well-located retail properties.”

Construction loans would also be an initial focus, he added.

The fund has “five deals in flight” and will participate in syndicated first mortgages originated by Cameron Stephens Mortgage Capital. It expects to take a 10 to15 per cent subordinated position in deals ranging from $10 million to $50 million in total size. 

Capacity to fund $600M to $700M in loans

This would enable Cameron Stephens to fund approximately $600-$700 million of originated loans in Western Canada, “with a focus on high-quality sponsors and well-located assets.”

“We’re proud to have brought together a group of highly respected and experienced Western Canadian real estate families to support this strategy,” said Brad Wise, Cameron Stephens’ senior vice-president and managing director, Western Canada, in the announcement. “Their participation not only capitalizes the fund but brings invaluable regional knowledge to our Western Canada operations.”

Cameron Stephens declined to provide additional information about the investment committee members, citing confidentiality for its investors.

The company does plan to increase the fund with additional equity infusions. Housley told RENX the Bay Street High Yield Fund began with $25 million and has since scaled to over $350 million.

“We see strong long-term fundamentals in markets like Calgary, Edmonton, Vancouver and the Fraser Valley, and we believe private credit will continue to play a critical role in supporting real estate development and refinancing needs,” Housley wrote. “Our ambition is to originate $1 billion in commercial mortgage loans across the region within the next two to three years.

"This fund gives us the capital structure to scale, deepen client relationships and play a meaningful role in the region’s growth.”

About Cameron Stephens

Founded in 2004, Cameron Stephens is a Canadian real estate investment firm with nearly $4 billion in assets under administration. 

Cameron Stephens offers institutional and private investors opportunities to invest in commercial real estate. The firm specializes in mortgage solutions through Cameron Stephens Mortgage Capital for developers across Canada.

Established in 2021, Cameron Stephens Equity Capital provides equity opportunities for developments.