Benefit Street rounds up $2.1bn for pair of funds

The firm will invest in mid-market companies with both funds.

Benefit Street Partners was closing in on the target for its fourth flagship fund and had surpassed its target for its special situations vehicle at the end of the first quarter, regulatory filings showed.

The New York-based firm had raised at least $1.52 billion for Benefit Street Partners Debt Fund IV and $538.43 million for Benefit Street Partners Special Situation Fund as of 31 March, according to regulatory documents filed with the US Securities and Exchange Commission last Friday.

Fund IV, which set a $1.75 billion fundraising target, listed assets worth $185.91 million at fair value, while the Special Situations Fund, which is eyeing $500 million, listed assets of $119.7 million at fair value. Both vehicles held a first close in January.

Benefit Street declined to comment.

Fund IV will target 160 to 200 investments in companies with enterprise values of $500 million-$2.5 billion and an expected hold period of two to five years for each position, according to a presentation to the Teachers’ Retirement System of Louisiana, which contributed $175 million. The vehicle targets a loan-to-value ratio of 50-60 percent, and it will invest evenly in deals with and without a financial sponsor.

The Special Situations Fund will invest in companies with capital structures of $1.5 billion or less. It lists a 1 percent management fee and a 13.75 percent carried interest provision over a 6 percent hurdle rate, according to documents from the New Jersey Division of Investment, which committed $150 million to the vehicle.

The firm has recently added two senior investment professionals, Deutsche Bank veterans Larry Zimmerman and David Waill, as managing directors, with the former also serving as head of private debt originations and the latter as a portfolio manager for collateralised loan obligations, the firm said in a statement.

The two men worked at the German investment bank with Tom Gahan and Michael Paasche, whom Providence Equity Partners hired in 2008 to build out their credit operations, which would eventually become Benefit Street, which now manages $20 billion in assets.