Blue Torch Capital closes on $1.7bn fund

Blue Torch Capital says it has closed its Credit Opportunities Fund II on $1.7 billion, beating the fund’s $1 billion target and hitting its hard-cap.

The fund, which was launched in March 2020, will invest in first lien, senior secured loans, across a broad array of industries to “companies in transition” in North America, the New York-based investment firm said in a news release. The mandate is consistent with Blue Torch Capital’s predecessor fund, Blue Torch Credit Opportunities Fund I, which held its final close in December 2018 on $750 million. That fund met its target, and had generated a 14.8 percent net internal rate of return as of 31 December, 2019, affiliate publication Buyouts reported last July, citing a presentation posted on the Kentucky Retirement Systems website.

“The current investment landscape continues to create unique opportunities for Blue Torch as our flexible, solutions-based strategy allows us to meet the complex needs of the borrower community,” Blue Torch Founder and chief executive Kevin Genda, a veteran of Cerberus Capital, said in the statement.

So far, Fund II has invested about 35 percent of its capital, and will target net levered fund returns of 13-15 percent, a spokesman said.

Fund II was able to secure commitments from investors in North America, Europe and Asia, across sovereign wealth funds, public pension plans, insurance companies, family offices and wealth managers. Kentucky Retirement Systems created a separate account with the firm last April, committing $200 million to Fund II, Buyouts reported. It is understood that New York State Teachers’ Retirement System also committed $200 million to Fund II.

Blue Torch, with $2.8 billion of assets under management, focuses on providing bespoke credit solutions to companies requiring capital support for growth, acquisitions, operational challenges and financial hurdles. Since it was founded in 2017, the Blue Torch platform has invested more than $2.4 billion in 57 portfolio companies.