distressed & special situations

CVC closes distressed fund above target at $1.42bn

Firm believes growing volatility in credit markets is likely to create more opportunities to acquire undervalued debt.

By
John Bakie
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CVC Credit Partners has closed its latest special situations fund above target at $1.42 billion.

The Global Special Situations Fund II was launched eight months ago and had an original target of $1 billion. It will continue the strategy of its predecessor vehicle which closed in June 2016 at $726 million.

CVC said the fund has a mix of returning and new investors, including pension funds, insurance companies, funds of funds, foundations, endowments and family offices. It added that the investors in the vehicle were based across the Americas, Europe, the Middle East and Asia.

The vehicle will invest in stressed and distressed debt in Europe and North America. It will primarily look to acquire senior secured debt from issuers that are undervalued with respect to enterprise value or cashflow.

Mark DeNatale, global head of special situations at CVC Credit Partners, said: “Given recent volatility in credit markets, and with banks continuing to reduce risk exposures, we see significant value in stressed and distressed credit opportunities in both the US and Europe.”

Since launching its special situations strategy in 2014, CVC has invested in more than 110 distressed issuers. The latest fund has already made nine investments and is more than 10 percent invested.

CVC’s special situations team plans to exploit the fund manager’s broader network to gain insight into businesses and understand sectors and the macro dynamics affecting the companies it targets.