Strategic Value Partners is targeting $1 billion for its third special situations fund, a source familiar with the firm told Private Debt Investor.
Like the firm’s previous special situations vehicles, Fund III will invest primarily in the distressed debt of mid-market companies. The source indicated that SVP will likely place greater focus on Europe than with its previous funds, citing the quantity of assets available through the offloading of troubled bank assets.
SVP’s previous special situations fund closed $318 million above its $600 million target last year. The firm has already called 72 percent of Fund II’s capital and the vehicle had generated a 16.7 percent net internal rate of return as 30 June, the source said.
The firm’s Special Situations Fund I has also performed well, generating a net IRR of 17.7 percent, the source said.
SVP was established in 2001 by Victor Khosla, who has worked in the distressed debt sector at Merrill Lynch, Cerberus and Moore Strategic Value Partners.
SVP had approximately $3.4 billion under management across its private equity and hedge fund strategies as of 1 June, according to its website. The firm maintains offices in Greenwich, London, Frankfurt and Tokyo.