Dignari Capital raises $262m for its second China fund

The Hong Kong-based credit manager is targeting to raise $500m for its second China-focused special situation fund.

Dignari Capital Partners, a Hong Kong-based private credit investment manager, has raised $262.2 million in equity so far for its second China-focused credit vehicle.

According to a late January SEC filing, the latest public filing available for this vehicle, the firm has raised the capital for DCP China Credit Fund II from a total of six investors.

The firm is understood to have started preparing for the fund launch late last year. With this latest vehicle, Dignari Capital Partners is targeting to raise $500 million in capital, almost double in size from its predecessor fund.

The firm closed its special situations flagship fund DCP China Credit Fund I at $256.1 million in December, 2014 according to another SEC filing.

In terms of strategy, the firm targets mezzanine debt and subordinated loans to corporates in the Greater China region, including Hong Kong, for the DCP China Credit Fund series, according to PDI data.

Dignari Capital Partners specializes in credit and special situations investments in the region with a focus on distressed corporates in China and Hong Kong.

In October, 2016 the private credit manager reportedly provided a $103.5 million-sized mezzanine debt piece in conjunction with Huatai Securities, a securities group that provides financial services in China, to partially finance one of the largest buyout deals in the telecommunication industry in Hong Kong.

The $1.2 billion buyout deal of Wharf T&T, a Hong Kong-based information and communications technology service provider, was done by an investment consortium of MBK Partners, a Hong Kong-headquartered private equity firm, and TPG Capital Partners, a San Francisco-headquartered private equity group.

Dignari Capital Partners typically invests between $50 million and $75 million in a credit transaction, and targets around eight to ten investments from its DCP China Credit Fund series, according to a person familiar with the firm’s strategy.

Dignari could not be reached for comments on the latest fund launch.