Benefit Street fund beats target by over $150m

The fund held a first close on $538m in January.

The Benefit Street Partners Special Situations Fund has held its final close on $667.2 million in capital, surpassing its $500 million fundraising target, filings with the US Securities and Exchange Commission showed.

The firm declined to comment on the fund.

The  vehicle invests in companies with capital structures of $1.5 billion or less, with a focus on North America and other regions opportunistically, according to documents from the New Jersey Division of Investment, which committed $150 million to the fund. It targets stressed and distressed investments, including low loan-to-value credit, high yield debt and restructuring opportunities.

The fund targets net internal rates of return of 15-20 percent and multiples on invested capital of 2-2.5x. It has a 1 percent management fee and a 13.75 percent carried interest provision over a 6 percent hurdle rate, the pension plan documents showed.

The fund had previously surpassed its fundraising goal in its first close on $538.43 million this January, which came alongside the close of the Benefit Street Partners Debt Fund IV on $1.52 billion.

The New York-based firm has recently added two senior investment professionals, Deutsche Bank veterans Larry Zimmerman and David Waill, as managing directors. The former is head of private debt originations and the latter is a portfolio manager for collateralised loan obligations.

Providence Equity Partners hired Deutsche Bank executives to launch its debt business, which later became Benefit Street, in 2008. The private credit subsidiary now has over $20 billion in assets under management, according to a statement.

There are 88 distressed debt or special situations funds in the market globally, seeking almost $94 billion, according to PDI data. Nine funds closed on just under $11 billion in the first half of this year.