BC Partners is weeks away from wrapping up a second opportunistic credit offering that will hit, or come close to hitting, its $1 billion hard-cap, sources told affiliate title Buyouts.
BCP Special Opportunities Fund II, an all-weather, mid-market private debt investor, will hold a final close in mid-October, sources said. The vehicle passed its $600 million target some time ago.
Fund II is benefitting from more extensive marketing than was used for its predecessor. Fund I, which closed in 2017 at $200 million, secured commitments primarily from BC Partners employees and associates and a few institutions, Buyouts reported.
Fundraising could also be benefitting from performance. Fund II has made more than 25 investments and is tracking above a 20 percent return, sources said. Its target return is 12 percent to 15 percent, according to a 2020 report by City of Hollywood Employees’ Retirement Fund.
Fund II’s expected closing comes four years after BC Partners hired Apollo Global Management’s Ted Goldthorpe to create and lead a New York-based private debt strategy. It was intended to complement the firm’s private equity business and tap into its global networks and resources.
Goldthorpe, formerly president of Apollo Investment Corp and CIO of Apollo Investment Management, set up BCP Credit with a dual focus on opportunistic credit and direct lending.
BCP Credit’s team of 20 professionals today oversees more than $4 billion in assets, sources said. Senior team members include partner Matthias Ederer, previously with Wingspan Investment Management, and partner Henry Wang, previously with Stonerise Capital Partners. Both earlier worked with Goldthorpe at Goldman Sachs.
BCP Credit’s opportunistic credit platform is flexible in nature, hunting for mid-market opportunities across cycles. This takes in mostly liquid special situations opportunities, such as event-driven or stressed/distressed investments. It also involves more illiquid private capital opportunities, such as structured investments in borrowers and assets supported by strong cashflows.
Fund II will source dealflow in North America and Europe, with the former region accounting for the lion’s share of activity, the City of Hollywood report said. Sectors of interest include business services, consumer, financial services, healthcare, industrials, retail and technology, media and telecommunications.
The post-covid-19 recovery is likely to present multiple opportunities to Fund II, some of them shaped by resumed growth and others by continuing uncertainty. In this environment, “the ability to be opportunistic and quickly shift focus is viewed as tremendously value-additive”, the City of Hollywood report said.
Fund II’s disclosed limited partners include Santa Barbara County Employees’ Retirement System, which is investing $10 million, and Teachers’ Retirement System of Louisiana, which is investing $75 million.
It will not be long before BC Partners is back in the market with a third opportunistic credit offering, sources said. A launch is expected to happen sometime in the second half of 2022.
BCP Credit this year added GP and NAV-based finance to its strategy with the appointment of Investec’s Tom Glover as operating adviser. It also unveiled a North American retail credit fund in partnership with Crown Private Credit Partners.
BC Partners, which has its headquarters in London, declined to provide a comment on this story.