Chicago-based Z Capital Partners has launched its second special situations fund with a $500 million target. Z Capital Special Situations Fund II is expected to hold a first close on around $200 million by the end of October, a source said. The 2007-vintage Fund I collected $300 million after revising its initial target from $1 billion down to $500 million. The firm specialisesin both distressed private equity and leveraged finance investments. In March, the firm took ownership of restaurant chain Real Mex, which had declared bankruptcy in October 2011. A former portfolio company of Sun Capital Partners, Real Mex is co-owned by Tennenbaum Capital Partners and JP Morgan Investment Management.