First Eagle Real Estate Debt Fund (FERLX): Fix-and-Flip Loans, a Seed Investor Heading for the Exit, and an October 7 Repurchase Deadline
Quick Answer
First Eagle Real Estate Debt Fund (Class I ticker FERLX, SEC CIK 2006189) is an interval fund that mostly lends to house flippers. At June 30, 2026, $56.9 million of its $80.3 million (71%) was short-term residential transitional loans, with another 8.2% in land-banking loans to homebuilders; its schedule of investments lists no office loan. Class I, the only class with shares outstanding, had a NAV of $25.41 after paying $1.04 a share in the first half of 2026. Three things matter for a holder now: accounts managed by one firm, Bleichroeder LP, owned 99% of the fund for its first year and still about 41% after selling 118,665 shares in July; the fund's costs were 3.99% before the adviser's waiver and 0.45% after, and the waiver ends April 30, 2027; and Victory Capital is buying First Eagle, so new advisory agreements are expected to go to a shareholder vote. The current repurchase offer, for up to 5% of shares with no fee, closes at 4:00 p.m. ET on October 7, 2026.
Key Takeaways
- Not commercial real estate. At June 30, 2026: residential transitional (fix-and-flip) loans $56.9M (71.0% of net assets), residential mortgage bonds 8.8%, land-banking loans 8.2%, one Freddie Mac multifamily bond 2.5%, cash 4.4%. The fund says it invests 'a significant portion' in New York, California and Utah.
- One family's accounts. Bleichroeder LP bought $34.4M of seed shares in 2025 and held about 99% until 2026. On July 7 it sold 118,665 shares back at $25.45 and now holds about 41%. The April 2026 SAI names Denise and Michael Kellen and the Marina Kellen French Foundation at 26.41% each.
- Two classes of holder. On June 30, 2026 the board extended the seed investors' waiver to own more than the fund's ownership limits and cut the limit for everyone else to 1.67%. An oversubscribed repurchase is cut pro rata for every holder.
- Subsidized. First-half 2026 expenses were 3.99% of net assets before the waiver and 0.45% after; net investment income was 4.86% without the waiver and 8.39% with it. The cap runs to April 30, 2027, and $2.45M of waived expenses (about $0.78 a share) can be recouped from the fund through 2029.
- Illiquid by design: $63.5M (79.1%) is Level 3 or restricted, nearly every loan is carried at par, all five land-banking loans are paid in kind, and $24.6M of loan commitments (30.6% of net assets) are still to be funded.
- Repurchases so far: nothing tendered in September 2025, 6,773 shares in January 2026, 11,694 in April, none prorated. The October offer closes October 7, 2026, with payment within seven days of pricing.
CSV · 72 rows
First Eagle Real Estate Debt Fund: NAV, expenses, portfolio, repurchases and ownership, 2025-2026
72 rows from the June 2026 semi-annual report, the 2025 annual report, the April 2026 prospectus, two supplements, the repurchase notices, the seed investor's Schedule 13D filings and N-PORT: NAV, expense ratios with and without the waiver, portfolio by type, every repurchase offer and every ownership change. One accession number per row.
What the fund is, and what the name leaves out
First Eagle Real Estate Debt Fund started on March 31, 2025 at $25.00 a share, managed day to day by Napier Park, a credit manager owned by First Eagle, with Rajesh Agarwal as portfolio manager. It is an interval fund: no listing, a NAV struck daily, and a repurchase offer every quarter. The prospectus lists six share classes (A-1 FRRAX, A-2 FNRLX, A-3 FIRLX, A-4 FRRLX, I FERLX, W FIRWX), but at June 30, 2026 only Class I had any shares. Class I asks $1 million per account, waivable through wrap programs and some intermediaries, which is how most holders get in: Charles Schwab and National Financial Services held 13.91% and 13.48% as omnibus accounts in April.
"Real estate debt" reads like office towers and commercial mortgage bonds. This fund is something else. Its biggest book is residential transitional loans: short loans, averaging 13.7 months, to investors who buy a house, renovate it and sell or refinance. The weighted average coupon was 8.6% and the loan-to-value 66%. Its land-banking loans finance lots for homebuilders at 13-14%. The fund's 2025 N-CEN names the firms it bought loans from, and they are fix-and-flip lenders: Sound Capital ($17.2 million), Kiavi Funding ($14.5 million), ICE Lender Holdings ($13.0 million), Iron Bridge Mortgage Fund ($9.6 million) and Arixa ($3.6 million). (Kiavi is also an affiliate partner of this site for its borrower loans; that relationship has nothing to do with this fund.)
| Holding at June 30, 2026 | Value | % of net assets |
|---|---|---|
| Residential transitional (fix-and-flip) loans | $56,938,578 | 71.0% |
| Residential mortgage-backed securities (credit-risk bonds, an RTL securitization, reverse-mortgage bonds) | $7,033,707 | 8.8% |
| Land banking loans (five, all paid in kind) | $6,584,782 | 8.2% |
| Commercial MBS: one Freddie Mac multifamily credit-risk bond | $2,015,899 | 2.5% |
| Money market fund | $3,555,289 | 4.4% |
| Reverse repurchase agreements (borrowing) | ($2,466,000) | (3.1%) |
| Other assets less liabilities | $6,603,317 | 8.2% |
| Net assets | $80,265,572 | 100.0% |
Source: schedule of investments, Form N-CSRS for the six months ended June 30, 2026 (accession 0001104659-26-105297). The paid-in-kind flag on the five land-banking loans is from the June 2026 N-PORT (accession 0002071691-26-021160).
The regional split of the loan book was West 62.4%, Northeast 27.2%, Southeast 6.4% and Southwest 4.0%. The largest single loan, to Farmstead TH LLC, was $4.6 million, 5.7% of the fund.
The seed investor, and the two sets of rules
Every new fund needs money on day one. This one got it from Bleichroeder LP, an investment adviser whose chairman is Andrew Gundlach, buying for accounts it manages. Its Schedule 13D filings show three purchases: 380,000 shares for $9.5 million at launch, $8.9 million in April 2025 and $16.0 million in August 2025, the last two paid for, the filings say, with proceeds from selling First Eagle Credit Opportunities Fund, another First Eagle interval fund. That left the accounts with about 99% of the fund. The April 2026 statement of additional information names who stood behind them: Denise and Michael Kellen, 26.41%, and the Marina Kellen French Foundation, 26.41%, both at Bleichroeder's address. The same document says "there were no control persons of the Fund", the term for anyone over 25%.
The first 13D, filed April 7, 2025, also described a promise. First Eagle Holdings, it said, "has committed, if any of the managed accounts holding Shares seeks to tender all of its Shares for four (4) consecutive quarters", after the third anniversary or once the fund reached $250 million, to buy whatever shares they still held at NAV. An amended and restated 13D filed the same day does not contain that paragraph, and no prospectus or report of the fund mentions it. We cannot tell from the filings whether the commitment still exists. If it does, the seed investor has an exit that other holders do not.
What the filings do show is the rules changing around the seed investor. The April 2026 prospectus said the seed investors' waivers from the fund's 9.8% ownership limit would expire on June 30, 2026, and that the fund expected to run a larger-than-usual repurchase offer before then. It didn't: the June offer was the standard 5%. Instead, a supplement dated June 30, 2026 says the board extended the seed investors' exemption and cut the limit for every other shareholder to 1.67%. The reason given is the REIT "5/50" test, which from July 1, 2026 bars five or fewer individuals from owning more than half the fund. On July 7 the Bleichroeder accounts tendered 118,665 shares at $25.45, about $3.0 million, and were left with 1,249,142 shares, about 41% of the 3,049,479 outstanding.
Why a holder should care: a 5% quarterly offer is about 150,000 shares. If the seed accounts keep selling at July's pace, they take most of it, and an oversubscribed offer is cut pro rata for everyone. Nobody is first in line: the semi-annual report even says "Shareholders unaffiliated with the Adviser and the Subadviser will not be given priority over Shareholders that are affiliates of the Adviser and the Subadviser". No offer has been prorated yet.
What it costs, and who is paying
| Class I, annualized | Mar 31-Dec 31, 2025 | Jan 1-Jun 30, 2026 |
|---|---|---|
| Operating expenses before the adviser's waiver | 6.01% | 3.99% |
| Operating expenses after the waiver | 0.43% | 0.45% |
| Net investment income without the waiver | 2.70% | 4.86% |
| Net investment income with the waiver | 8.28% | 8.39% |
| Total return, not annualized | 6.56% | 4.64% |
| Distributions per share | $1.31 | $1.04 |
Source: financial highlights, Forms N-CSR (accession 0001104659-26-024587) and N-CSRS (accession 0001104659-26-105297). The 2025 annual report's overview labels the 6.56% an "average annual return" since inception; the financial highlights mark the same figure "not annualized", so it is a nine-month return.
The adviser charges 1.25% a year on "Managed Assets", which include borrowed money, and then caps Class I operating expenses at 0.25% of net assets, excluding interest and a few other items. In the first half of 2026 it waived $1,134,265 of $1,288,326 in expenses. The payout, which the 2025 report put at an annualized 8.25%, has been covered by net investment income only because of that waiver: without it, income was 4.86% of net assets. Two dates follow from that. The cap "lasts until April 30, 2027." And the adviser can take back $2,448,724 of what it has waived, about $0.78 a share, within three years of each waiver (so until 2028 and 2029), as long as repaying it does not push the fund's expenses above the cap.
Valuation and liquidity
$63.5 million, 79.1% of the fund, is Level 3 or restricted, valued on unobservable inputs. Nearly every loan is carried at 100 cents on the dollar, and the change in unrealized value on Level 3 assets for the half-year was minus $2,659. The fund discloses no delinquency or extension figures, and the N-PORT flags no loan in default. A par mark is normal for a short loan that is paying; it also means the NAV will not show stress until a loan is written down.
On the other side of the ledger, $24.6 million of loan commitments, 30.6% of net assets, had yet to be funded, $12.6 million of them to the land-banking projects. Against that and a 5% repurchase every quarter, the fund had $3.6 million in a money-market fund and $9.0 million of Level 2 bonds, some pledged for its $2.5 million of reverse repos.
The sale of First Eagle, and your vote
First Eagle has changed hands once already since this fund opened: Genstar Capital bought control from Blackstone and Corsair in August 2025. On August 26, 2026, Victory Capital agreed to buy First Eagle Holdings, closing expected in the first quarter of 2027. Under the 1940 Act that ends the fund's advisory and sub-advisory agreements, so the board will consider new ones with Victory Capital Management and Napier Park and, if it approves them, "will be presented to the shareholders of the Fund for approval". The supplement adds: "There is no assurance that the Board or the shareholders will approve the New Advisory Agreements." With about 41% of the shares in accounts managed by one firm, that vote starts with a large block already in one set of hands.
Repurchases, and the one open now
| Deadline | Offered | Tendered | Repurchased | % of shares |
|---|---|---|---|---|
| September 24, 2025 | 71,210 (5%) | 0 | 0 | 0.00% |
| January 7, 2026 | 99,970 (5%) | 6,773 | 6,773 ($171,627) | 0.34% |
| April 7, 2026 | 129,784 (5%) | 11,694 | 11,694 ($297,030) | 0.45% |
| July 7, 2026 | 5% | Fund total not yet reported; the Bleichroeder accounts alone sold 118,665 | 118,665 at $25.45 (Bleichroeder) | - |
| October 7, 2026 (open) | 5% | - | - | - |
Sources: Note 8 of the N-CSR and N-CSRS; Schedule 13D/A (accession 0000905148-26-003214); repurchase notice, Form N-23C3A (accession 0000930413-26-002864).
The current offer is for up to 5% of shares. Requests must be in by 4:00 p.m. Eastern on October 7, 2026, the price is the NAV on the pricing date (expected to be the same day), payment comes within seven days after that, and "The Fund will not charge a repurchase fee" this time. The notice gave a reference NAV of $25.58 on August 28. If more than 5% is tendered the fund may take up to 2% more, and otherwise cuts every request pro rata. The next deadline is expected on January 6, 2027.
If you hold FERLX
- Decide on October 7 with the seed investor in mind. If the Bleichroeder accounts keep tendering, later offers are the ones most likely to be prorated, and proration applies to every holder alike.
- Read the proxy when it comes. The Victory vote is on who manages your money and at what fee; the waiver that keeps costs at 0.45% expires about when the deal is due to close.
- Price the payout without the subsidy. At 4.86% net investment income before the waiver, the 8%-plus distribution depends on First Eagle's generosity, and part of what it waived can come back.
- Know what you own. This is short-term lending to house flippers and land developers, mostly in three states, marked at par. For how other real estate interval funds handle exits, see our interval fund comparison and NAV REIT vs interval fund; for what a fix-and-flip loan looks like from the borrower's side, the lenders that sell them loans, checked.
FAQ
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When First Eagle Real Estate Debt Fund files: what changed, the one number that matters, and the accession number to check it yourself.
All figures are from the filings cited, read on EDGAR on September 28, 2026. The total of the seed purchases, the per-share value of the recoupable waiver, the share of net assets in unfunded commitments and the size of a 5% offer are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.
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