Clearwater targets $300m for Yield Fund – exclusive

Clearwater Capital Partners wants to raise $300 million for its new distressed credit fund, a source familiar with the matter told PDI. Clearwater Capital Yield Fund was launched on 26 November 2018, according to two regulatory filings.

The Hong Kong-headquartered firm held a first close on an undisclosed amount for the vehicle in January, the source said.

The fund is denominated in US dollars and targets the Asia-Pacific region, including Australia, China, India and Korea. It plans to invest in performing credit of asset-heavy industries, both in loans and bonds.

It is confirmed that Clearwater is targeting a gross internal rate of return ranging from 12 to 20 percent, and over a 1.4x multiple of invested capital. The fund has a two-year investment life and a three-year harvest period.

Clearwater could not be reached for comment on the latest fund launch. A London-based spokeswoman for Clearwater shareholder Fiera Capital confirmed to PDI that Fiera anchored in Clearwater Capital Yield Fund, with a commitment of $50 million. She added that the firm also committed another $50 million to Clearwater Capital Partners Direct Lending Opportunities Fund, launched in Q4 2018.

Among Clearwater Capital Yield Fund’s investors, International Finance Corporation, a member of the World Bank Group, disclosed its $75 million commitment to a co-investment vehicle managed by Clearwater in January 2018.

PDI previously reported that Toronto-listed asset management firm Fiera Capital had agreed to purchase Clearwater shares, worth $21 million as of 1 March 2018, subject to various adjustments.

Clearwater’s merger with Fiera Capital was completed on 10 August 2018 for a total consideration of up to $65 million, according to a statement from Sullivan & Cromwell, a New York-headquartered law firm that represented Fiera for the acquisition. The statement showed that Fiera Capital managed more than $111 billion across traditional and alternative assets as of 30 September 2018. Clearwater managed about $1.4 billion of assets.

Just this year, at least three Pan-Asian private credit investment managers have launched their latest credit funds, seeking either real estate-backed credit or corporate credit investment opportunities. The fundraising amount has been boosted by PAG with its third special situations fund, PAG Special Situations Fund III, and SSG Capital Management, which raised $150 million for SSG Capital Partners V ­­– its fifth special situations fund – from the Virginia Retirement System, a US public pension plan administrator.