CVC special situations fund nears first close of $300m

The credit arm of CVC Capital Partners expects to raise $750m by year-end.

London-headquartered CVC Credit Partners is expected to hold a first close of $300 million on its debut special situations fund before June.

CVC Credit Partners Global Special Situations Fund is targeting $750 million. The firm expects to raise the amount for the pooled fund by year-end, as first reported by Bloomberg

The fund will invest in a diverse portfolio of investments in stressed and distressed corporate credit, primarily in the debt of European companies, PDI understands. It will buy loans at less than face value rather than take a loan-to-own approach.

CVC Credit Partners declined to comment.

According to its website, the focus of the investment strategy is to invest in bank loans, high-yield bonds, mezzanine and structured products. It will also selectively invest in short positions and other derivative transactions or equity, often created through debt restructuring.

Opportunities are expected to come from loans due to be offloaded by European banks as a result of regulation, as previously reported by PDI. The fund is expected to have a six-year term.

Key executives on the fund include New York-based Stephen Hickey, chief investment officer of CVC Credit Partners, and Mark DeNatale, partner and global head of trading.

CVC is also currently marketing a €600 million pooled direct lending fund. In addition, it has a €300 million separately managed account mandate for investing in credit. According to its website, the firm has dedicated vehicles for four strategies including special situations, direct lending, performing credit and credit opportunities.

Neale Broadhead, managing director and portfolio manager, based in the UK is leading the direct lending initiative in Europe, while Tom Newberry, partner and head of private funds based in the US, is also instrumental, as previously reported.

CVC Credit Partners, the credit arm of private equity firm CVC Capital Partners, has $12 billion of assets under management in the US and Europe.