PIMCO raises $934m for second distressed fund

The California-based investment firm’s fund targets structured securities.

PIMCO has raised $934.4 million for its second open-ended distressed debt fund, according to a US Securities and Exchange Commission filing on Friday.

Launched in October 2011, the PIMCO Distressed Senior Credit Opportunities Fund II (DiSCO II) focuses on senior and super senior structured securities, including commercial mortgage backed securities,  residential mortgage-backed securities, credit default swaps and collateralised debt obligations, according to an August 2011 City of San Jose Police & Fire Department Retirement Plan investment document. Consultant NEPC recommended a $40 million investment.

Coral Gables Retirement System made a $14.67 million commitment to the fund in December 2011, according to the pension fund’s second-quarter investment report. The Teachers Retirement System of the State of Illinois also made a $40 million commitment to the fund, its May 2012 investment committee meeting minutes show.

“DiSCO II seeks, and DiSCO sought, to capitalise on the liquidity crisis in senior bonds across credit markets primarily in MBS, ABS, CMBS, investment grade and high yield,” a PIMCO investor presentation to the North Dakota State Investment Board said in July 2013.

The firm declined to comment further on the fundraising.

The firm ceased operations and liquidated its first DiSCO fund in March 2002, which generated $2.68 billion in capital commitments and a lifetime net internal rate of return of 11 percent, according to a May meeting document from a City of Fresno Retirement Systems meeting.

On top of the recent fundraising for its second distressed fund, PIMCO has teamed up with Solar Capital Partners to form a corporate credit joint venture, the firm said on Wednesday.

Solar Capital provides financing to mid-market companies predominantly in the US, and has invested $5.8 billion in over 255 portfolio companies since its formation in 2006, according to the announcement.

PIMCO is a global investment firm that provides investment and asset management services for pension funds, public and private companies, central banks, educational institutions, financial advisors, foundations and endowments. The firm is owned by Allianz, a global financial services company.