Cerberus tops another target with $2.05bn fundraise

The firm’s latest private credit fund is the third in a row to surpass its target, securing a $100m commitment from the San Francisco Employees' Retirement System, among others. 

Cerberus Capital Management’s mid-market lending arm has surpassed its $1.5 billion to $2 billion goal for its most recent direct lending fund, the alternative lender said on Thursday.

New York-based Cerberus Business Finance pulled in $2.05 billion for its Cerberus Levered Loan Opportunities Fund III.  The San Francisco Employees’ Retirement System invested in the fund, approving a $100 million commitment at its March 2016 meeting. Alongside public pension plans, limited partners making allocations to LLOF III included corporate pensions, insurance companies, funds of funds and high-net-worth individuals.

LLOF II raised $1.5 billion, which surpassed Cerberus’ goal of $1.1 billion, while its LLOF I raised $841 million also topping its goal of $750 million. The Pennsylvania Public School Employees’ Retirement System committed $225 million to LLOF II and $200 million to LLOF I. The Florida State Board of Administration (SBA) also invested $200 million in LLOF I.

CBF chief executive Daniel Wolf said: “Our broad array of [private equity] sponsors and other client relationships consistently turn to us for certainty of transaction closure and terms, flexible capital structures, and speed of execution through a reputable, well-known franchise.”

Cerberus has also had success in lining up separate accounts for its direct lending strategy. PSERS embraced the firm’s direct lending strategy a third time when, in June 2015, it set up a $300 million managed account, the Cerberus PSERS Levered Loan Opportunities Fund. The SBA last year set up a $200 million fund-of-one vehicle, Cerberus FSBA Levered Loan Opportunities Fund.

The firm has already been active in 2017 on the fundraising side, already closing at least one fund this year. Cerberus closed a $1.8 billion opportunistic real estate fund, Cerberus Institutional Real Estate Partners IV. The vehicle will primarily target highly complex or distressed real estate equity and debt transactions where competition is limited. The firm will seek to invest roughly half of the fund’s capital in the US and the remainder in western Europe.

Its latest distressed debt vehicle, Cerberus Institutional Partners VI fund, is also in market, having raised $3.26 billion toward its $3.5 billion target, PDI exclusively reported in September. CIP VI carries a $4 billion hard-cap and will make 100 and 200 investments with a focus on North America, western Europe and Asia and has a four-year investment period.