CarVal closes third fund on $3bn

The independent subsidiary of Cargill raised the distressed credit fund in just over a year.

CarVal Investors has closed CVI Credit Value Fund III on $3 billion, according to a statement by the Minneapolis-headquartered firm.

The firm had a target of $2 billion, as reported by PDI, and reached its $3 billion final close six months after a second close on $1.24 billion in commitments in January. It was launched in spring 2014. 

“CVI III is carrying forward a similar investment strategy as CVI Credit Value Fund I and II, investing across our core credit strategies or ‘four boxes’ of loan portfolios, corporate securities, liquidations and structured credit. However, given the continuing opportunities in European deleveraging, CVI III is more heavily weighted in loan portfolios at this point. We expect to balance this with corporate securities and structured credit opportunities during the second half of the investment period as the recovery ends and the dislocation of the next market cycle begins,” said John Brice, CarVal president and chief investment officer.

The vehicle attracted commitments from 83 institutional investors including commodities trader Cargill, which founded the firm. Private pension plans, endowments, foundations, family offices and corporate investors also formed part of the group, CarVal said. 

Investors identified in previous reports by PDI include the Massachusetts Pension Reserves Investment Management Board, which committed $150 million; Fresno County (California) Employees Retirement Association with an allocation of $30 million and with $50 million, the New Hampshire Retirement System. 

Earlier this year, London-listed Arrow Global revealed that it had bought a loan servicing company from CarVal and at the same time signed a five-year agreement with CarVal to service some of the manager’s NPL assets. 

CarVal’s investments include portfolios of whole loans, high-yield loans, bonds and bank debt of leveraged or distressed borrowers, claims against bankrupt or liquidating firms, and residential and commercial mortgage-backed securities. 

CarVal was founded by Cargill in 1987 before becoming an independent subsidiary in 2006. The firm manages $10 billion in assets under management through both credit and real estate strategies. Alongside its Minnesota head office, the firm has outposts in London, Luxembourg, New York, Paris and Singapore.