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Hedge fund firm Deer Park Road Management Co. is mobilizing capital to snap up debt tied to commercial real estate, betting the investment will eventually mint lucrative returns.

Deer Park has launched its first commercial mortgages fund targeting debt backed by office buildings at steep discounts, Chief Investment Officer Scott Burg said in an interview. The Commercial Mortgage Opportunities I fund is looking to raise as much as $500 million for the strategy that offers an 8% hurdle rate, he added.