Strategic Value Partners has held a first close on its fourth vehicle targeting distressed debt in the mid-market globally on a total of $1.03 billion, according to market sources.
Strategic Value Partners Special Situations Fund IV set a target of $1.75 billion, according to a recent communication to investors. Of the capital locked down on the initial close, $677 million were commitments to the main fund, while the other $350 million was set up as a fund-of-one.
Fund IV began raising capital in 2016, according to filings with the US Securities and Exchange Commission.
The firm declined to comment.
SVP’s Fund III closed on $1.3 billion, above its initial $1 billion fundraising target, in 2014, according to a Strategic Value statement. Fund III was more Eurocentric than its previous funds, which were both focused on distressed debt of mid-market companies and assets globally.
The earlier fund charged a management fee of 1.75 percent on committed capital and a 20 percent carried interest fee, according to investor documents from Brighton, Colorado-based Adams County Retirement Plan, which committed $2 million. The fund had an 8 percent hurdle rate.
Fund III had commitments from European pension plans and investors, which included Greater Manchester Pension Plan, and Zurich Invest, PDI data shows. Strategic Value Partners is a global investment firm established in March 2001 and focused on distressed credit through restructurings, event-driven deals, special situation and trading-oriented opportunities.
The Greenwich, Connecticut-based firm had $5 billion in assets as of 1 January, according to its website.
Distressed debt accounted for 20 percent, or $6.24 billion, of the $31.19 billion private debt capital raised in the first quarter 2017, according to PDI data. That total is down from the end of last year, when PDI data showed a third of credit funds in the market had a distressed investing strategy, as LPs appeared to sense the credit cycle coming to a close.