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Anchorage raising $1.25bn distressed fund with expanded geography – exclusive

The firm’s latest vehicle is its third in the last four years and sixth in the series since 2009.

Anchorage Capital Group is in market with is sixth closed-end distressed debt fund, according to Massachusetts Pension Reserves Investment Management Board’s (MassPRIM) November meeting materials.

The New York-based special situations investment firm is seeking $1.25 billion for Anchorage Illiquid Opportunities VI, which will target small and medium-sized companies, the documents showed.

An Anchorage representative was not immediately available for comment.

The vehicle will invest up and down the capital structure through myriad strategies, including distressed debt, restructurings, illiquid claims and structured credit as well as debt and equity in the primary and secondaries markets.

Fund VI landed a $125 million commitment from the Boston-based retirement plan, which is a repeat Anchorage investor. MassPRIM committed the same amount to 2015-vintage Fund V, which also sought $1.25 billion, and $75 million to 2013-vintage Fund IV, which targeted $1 billion. The Nashville & Davidson County Metropolitan Government Employee Benefit Trust also pledged $40 million to Fund V.

With Fund VI, Anchorage has broadened the vehicle’s geographic footprint from its predecessor. The in-market pool of capital will invest in North America, Europe, Australia and New Zealand, while Fund V concentrated on North America and Western Europe, MassPRIM materials showed.

The Illiquid Opportunities series charges a management fee of 1-2 percent from the vehicle’s assets under management and typically levies a 15-20 percent incentive fee, according to the firm’s 31 March US Securities and Exchange disclosures.

Among other investments, Fund V bought common stock in Goodrich Petroleum Corporation in December, shortly after the Houston-based company emerged from bankruptcy, according to SEC filings. The reorganised company eliminated $400 million via a debt-for-equity with its second lien noteholders, according to an announcement from October 2016.

Anchorage’s Fund V also invested in Houghton Mifflin Harcourt, a Boston-based education company that went through bankruptcy in 2012 and has made layoffs this year. A third company Anchorage committed capital to was Tema Oil and Gas Company prior to its merger with a special-purpose vehicle backed by KLR Group, a Houston-based boutique investment banker focusing on the energy sector.

Founded in 2003, Anchorage embraces an active long and short basis, taking and manages evergreen funds and collateralised loan obligations. The firm managed $27.1 billion as of the end of last year