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TPG Credit closes distressed fund above target

The firm, in which TPG Capital owns a 5% stake, beat its $800m target and closed on $997m. The fund is one of a number of distressed vehicles focusing on opportunities in both the US and Europe.

Minneapolis- and London-based TPG Credit Management has closed its TPG Credit Strategies Fund II on about $997 million, above its $800 million target and just shy of its $1 billion hard-cap.

Fund II will focus primarily on distressed assets with “some exposure to asset rich distressed corporate credit”, according to a statement. The main target areas will be within aviation, European non-performing loans and US distressed asset opportunities. Fund II, which was placed by Denning & Company, has already deployed around 35 percent of its capital, according to a spokesperson.

Limited partners in Fund II include the Arkansas Teacher Retirement System and the West Virginia Investment Management Board. Roughly 60 percent of investors in the fund are new limited partners.

TPG Credit’s prior distressed debt fund, a 2007 vintage, collected $443 million.

TPG Credit is one of many private equity groups finding success on the fundraising trail with distressed vehicles. The Blackstone Group’s debt affiliate GSO Capital Partners is expected to hold a first close for its second “rescue fund,” GSO Capital Solutions Fund II, in November, according to a source with knowledge of the vehicle. Like TPG’s second distressed vehicle, the fund targets opportunities in both Europe and the US.

Kohlberg Kravis Roberts, Apollo Global Management and Oaktree Capital Management have also been focusing on European credit-related opportunities.

Launched in 2005, TPG Credit’s other funds under management include a $605 million aviation fund and a $1 billion “hung bridge” fund for loans that were stuck on bank balance sheets after the subprime and financial crises.

TPG Capital owns a 5 percent stake in TPG Credit.