SSG Capital Management’s second special situations vehicle has made a final close on its $400 million hard-cap having targeted $300 million, PE Asia has learned.
The firm did a first close at around $100 million in February and has deployed one-third of its capital since. Mercury Capital Advisors acted as the placement agent.
SSG Capital Partners II was heavily oversubscribed, according to managing partner and chief investment officer Edwin Wong, who said the firm had tried to increase the fund’s hard cap but an anchor investor wouldn’t agree to it.
He added that roughly 80 percent of investors re-upped from Fund I, which closed just above $100 million in December 2010.
However, mostly new LPs committed to Fund II because of the larger size. The LP base is made up of European and US investors, with Asian LPs representing a relatively small percentage, according to Wong. LPs are a balance of pension funds, family offices and insurance companies, with one sovereign wealth fund, he added.
Fund I has now been fully deployed, Wong said, adding that the firm has returned capital to LPs and he believes the investors were satisfied with the IRR performance.
The new vehicle will have the same mandate as its predecessor, targeting special situations including distressed, turnaround and credit opportunities in the Asia Pacific region, but is likely to focus on Greater China, India and Indonesia.
In China, “many private equity funds are struggling with exits and there's a long queue waiting for the IPO market to open. Liquidity issues [with private equity funds or corporations] create opportunities for us,” Wong said.
Distressed private equity funds are becoming more common in Asia as firms take advantage of lacklustre capital markets in the region and the depressed global economy.
Other firms targeting special situations opportunities include PAG, which raised a $900 million distressed fund in 2011 to acquire Asian businesses from European or US firms forced to sell their assets. Apollo Global Management and ICICI Venture also held an undisclosed first close on their joint venture AION in May. It will target distressed deals in India.
SSG Capital Management is an alternative asset manager focusing on special situations in Asia including Japan. The firm was founded in 2009 by senior members of the Lehman Brothers Asia special situations group.