SVP raises $1.83bn of $2.1bn goal for latest special sits fund – exclusive

The vehicle, like many of the other largest funds in market, will target distressed or turnaround situations.

Distressed debt specialist Strategic Value Partners continues to raise cash for its latest fund, which comes amid growing appetite for special situations or distressed debt among the largest funds in market.

The Greenwich, Connecticut-based firm’s Strategic Value Special Situations Fund IV has locked down $1.83 billion, according to a person familiar with the situation, and is closing in on its fundraising goal of $2.1 billion. The target comprises a $1.75 billion commingled fund and a $350 million fund-of-one partnership. The total raised so far includes the latter portion of the fundraise, which has a $2.83 billion hard-cap.

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 statement. Fund III had commitments from European pension plans and investors, which included Greater Manchester Pension Plan, and Zurich Invest, PDI data shows. The earlier fund charged a management fee of 2 percent on committed capital and a 20 percent carried interest fee, the source said.

A good number of the top 20 funds in market will invest in special situations or distressed debt, according to PDI data. They include GSO Capital Partners and CarVal Investors. GSO’s third distressed debt fund, the GSO Capital Solutions Fund III targeting $6.5 billion that has raised $6 billion, and CarVal’s fourth distressed fund, CVI Credit Value Fund IV, has raised $2.36 billion towards a $3 billion target.

Distressed debt behemoth Apollo Global Management continues to rack up large sums for as well. Its $3.5 billion Apollo European Principal Finance Fund III, a vehicle focusing on distressed European financial assets that has collected over $4 billion. In addition, it will set aside up to one-quarter of its latest flagship buyout fund, Apollo Investment Fund IX, which raised almost $25 billion.

Vehicles focusing on special situations funds may receive wider attention from limited partners. Of those polled by Probitas Partners for its 2018 investor survey, 36 percent expressed a preference for a special situations strategy versus 22 percent for distressed debt.

In addition to its Greenwich outpost, SVP has offices in Frankfurt, London and Tokyo. The firm manages $6.9 billion across hedge fund and private equity-style funds. The firm invests in distressed companies, being actively involved in bankruptcies or out-of-court restructurings. It also deploys capital into turnaround situations, focusing on the strategic or operational side of a company.