Kennedy Lewis Investment Management has closed its debut vehicle only a year after opening shop and added to the ranks of the firm’s top personnel, according to a source familiar with the situation.
Kennedy Lewis Capital Partners, which was oversubscribed, hit its $500 million capital raising target last month, Private Debt Investor understands.
The fund will be invested in bespoke financing arrangements and special situations. KLIM turned away “significant additional commitments” looking to allocate to the debut fund, according to a source familiar with the situation.
The New York-based firm, which started with an aggregate $60 million commitment from the firm’s partners, has also offered its LPs a “significant amount of co-investments”, this person added.
Benjamin Schryber, a KLIM partner and its head of business development, said in a statement: “We wish to thank all of our limited partners, those with whom we have enjoyed a historical relationship while at our prior firms, and of course those new relationships that we have formed in the last year.”
He declined to comment further.
KLIM is aiming for a 1.5x multiple on invested capital on each investment, and is agnostic across industry, geography and security type, according to its website. The firm will charge a management fee of up to 1.5 percent and a 20 percent carried interest after clearing an unspecified hurdle rate, Securities and Exchange Commission registration documents showed.
In addition, the credit manager has also made another key hire by bringing on Rich Gumer, formerly of White Plains, New York-based Life Science Alternative Funding, as a partner to help source deals involving late-stage biotechnology and medical device companies that have products already approved by the US Food and Drug Administration.
David Chene and Darren Richman founded KLIM last November. Chene is formerly a managing director at Minneapolis, Minnesota-based CarVal Investors where he oversaw the firm’s US corporate securities business, while Richman was previously a senior managing director at New York-based GSO Capital Partners, where he worked on special situations and distressed debt investments.
KLIM has fleshed out its senior staff at a rapid clip. In addition to Gumer, KLIM has brought on, among others, the former CarVal Investors president, chief executive and chief investment officer John Brice as chairman; Anthony Pasqua as chief financial officer, who previously worked for credit-oriented hedge funds; and Schryber, former fundraiser for The Carlyle Group and First Avenue Partners, as head of business development.
Special situations funds have garnered a positive response from investors recently. LPs at the annual PDI New York Forum in September picked special situations as the most promising strategy in the coming months. Some 43 percent of respondents chose it, while direct lending took second place with 36 percent.
In addition, sources close to two Korean LPs that invest primarily in direct lending told Private Debt Investor last week that now may be the time to start looking at potential distressed debt vehicles, or at least putting the idea on the table.
Special situations and distressed debt funds also had a banner fundraising year in 2017. Vehicles focused on such investment strategies raised $66.67 billion, the highest since at least 2012. So far this year, the strategies have collected $21.12 billion.