Silver Point approaching target for drawdown distressed vehicle

The distressed debt hedge fund is raising a locked-up fund that has a hard-cap double the fund’s target.

Silver Point Capital is seeking $750 million for distressed investments in the North American mid-market businesses, a goal for which the firm has already passed the two-thirds mark.

The Greenwich, Connecticut-based firm is in market with its Silver Point Distressed Opportunity Institutional Partners, which has a $1.5 billion hard-cap, according to an investor presentation to the New Mexico State Investment Council.

NMSIC committed $100 million at its March meeting, while the Texas County & District Retirement System allocated the same amount in its February meeting, materials from both pension funds showed.

Silver Point has already collected $511.21 million for the vehicle, according to a Securities and Exchange Commission regulatory filing, and is anticipating a final close in the third quarter. The NMSIC commitment likely brings it to at least $611.21 million, as the commitment came after the regulatory filing.

The firm did not provide immediate comment.

NMSIC received a 0.15 percent discount on its management fee, meaning it will be paying 1.35 percent on invested capital rather than the standard 1.5 percent. Silver Point charges a 20 percent carried interest over an 8 percent hurdle rate, the documents showed.

The investment period, which starts either one year after the final close or on the first capital call, is three years with a possible one-year extension. The harvest period consists of a three-year time frame with the possibility for two one-year extensions.

Founded in January 2002, Silver Point focuses on distressed and special situations investments. The firm also runs a direct lending vehicle, Silver Point Specialty Credit Fund, which it launched in 2016. Silver Point had launched a direct lending strategy early in its history via a special pool of capital in its flagship hedge fund, but put the strategy on hold in 2008 as it decided to focus on its core strategy. Eight years later, the firm jumped back into the direct lending space.