Greywolf aims for $500m on distressed fund – exclusive

The Purchase, New York-based investment shop plans to roll separately managed accounts into a commingled distressed fund.

Greywolf Capital Management is in the process of raising a new distressed debt fund with a two-year investment period, a source familiar with the matter told PDI.

The Purchase, New York-based investment shop plans to roll separately managed accounts (SMAs) into a commingled fund with a $500 million to $1 billion target, this person said. The source declined to disclose more details about the SMAs. Investors in the new fund could include endowments, pension funds and family offices. The firm’s previous distressed fund is an open-ended fund.

Greywolf, which focuses on CLOs and event-driven investing, has been active in multiple Chapter 11 cases in recent years and participated in transactions structured as loan-to-own deals, in which a creditor acquires debt with the end goal of owning the company.

Greywolf participated in the K-V Pharmaceutical Chapter 11 case, in which the firm, alongside other investors, ended up owning a majority stake in the reorganised entity, which was subsequently sold to Lumara Health. Greywolf is also involved in the Horsehead Holding Corporation and reportedly attempting to own the debtor’s assets.