The Och-Ziff Real Estate Fund has won big on its 0 million investments in tribal casinos, Bloomberg Business reported.
The investment company has about a fifth of its real estate investments in tribal casinos, which Bloomberg reports had difficulties obtaining traditional financing from banks and other capital sources for casino developments.
Recognizing an opportunity to get involved in a $25 billion-per-year industry, Och-Ziff stepped in and offered support financing for a multitude of casino projects among many of the 566 federally recognized tribes in the United States.
The hedge fund’s first investment was the WinStar casino expansion in 2007, and the fund offers tribes loans for up to 15 percent interest with up to five-year repayment periods, Bloomberg reported.
The fund also owns many of the slot machines located in tribal casinos and leases them back to the casinos for about 20 percent of the net revenues, and it has financed several hotel projects and others that will help to boost gaming opportunities and revenues at tribal casinos.
About 40 percent of federally recognized tribes have casino gaming operations, and Och-Ziff recognized a great opportunity to position itself as a key source of financial support at tribal operations across the nation. Och-Ziff is one of the major funders of casinos operated by the Seminole tribe, including the Hard Rock casinos in Florida.
