Kennedy Lewis has closed its third opportunistic credit fund on $4.1 billion, beating its $3.5 billion target.
Kennedy Lewis Capital Partners III also included co-investment vehicles and employs an all-weather, opportunistic strategy designed to benefit from periods of dislocation, the firm said.
The fund focuses primarily on non-sponsored borrowers with attributes that make them countercyclical or less correlated to the broader market, and which are often underserved by traditional banks and lending platforms. In addition to its focus on private, first-lien investments, Fund III is also able to invest in liquid instruments and across the capital structure. It was launched in September 2021, per Private Debt Investor research. The predecessor fund closed in January 2021 at $2.1 billion, more than double its target.
The New York-based manager said it received commitments from a diverse group of investors from the US, Europe and the Middle East, that included pensions, insurers, sovereign wealth funds, foundations and endowments. Among the investors is the San Francisco Employees’ Retirement System, with an $80 million commitment, and the Vermont Pension Investment Committee, which committed $50 million of capital, per PDI research. The fund is approximately 50 percent deployed.
The fund’s sector focus includes life sciences, power, technology and media and telecommunications, as well as cyclical industries and tactical opportunities, where Kennedy Lewis can “capitalise on dislocations to deliver attractive risk-adjusted returns for investors and value-added, bespoke capital solutions to borrowers”, the firm said.
The fund also includes exposure to the firm’s homebuilder finance strategy, which “provides structural capital solutions to US homebuilders to acquire land and complete horizontal development in a capital efficient manner that alleviates balance sheet demand and unlocks enterprise value”.
David K Chene, co-founder and co-managing partner of Kennedy Lewis, said: “Our go-anywhere approach, which leans into disruption and complexity, offers investors a differentiated return stream compared to more narrowly constructed credit offerings.”
Darren l Richman, co-founder and co-managing partner, said the firm is “proud of the value we bring to borrowers, many of whom address large market needs such as power generation… and the undersupply of housing in the US”.
Kennedy Lewis has approximately $14 billion of assets under management.