King Street closes GDF II with $2.3bn

Second vintage of distressed and dislocated credit fund also beats its target.

King Street Capital, a New York-based alternative investment firm founded in 1995, closed 4 October on its Global Drawdown Fund II with $2.3 billion in commitments, which exceeds the $2 billion target.

The fund launched in May 2022 and had an initial close in September 2022 ($345.58 million) and a second in January 2023 ($1.65 billion), according to Private Debt Investor research.

In a statement, King Street partner and head of restructuring Daniel Ehrmann expressed satisfaction with the 4 October close: “We believe the headwinds facing the global economy are giving rise to a new credit regime with a compelling, robust and actionable opportunity set.” GDF II is in a good position to capitalise on “distressed and dislocated credit globally”, he noted.

The fund is a successor to Global Drawdown Fund I, which launched July 2020, according to PDI research. GDF I’s final close on $1.2 billion in July 2022 also beat that fund’s target of $750 million. King Street says GDF I is now fully invested.

Like its precursor, GDF II looks to distressed corporates, and the two have many of the same investors. “We are pleased with the strong support of the longstanding clients who re-upped for GDF II and are excited to partner with the new investors committing to the Fund,” the statement pointed out.

GDF II has a broad geographical focus that includes North America, Western Europe and Asia-Pacific. GDF I took as its field for investment those three regions as well as Central and Eastern Europe.

King Street, a partner-owned firm, has more than $24 billion in assets under management as of 31 August, according to its website.