UBS O’Connor raises $1.7bn for credit opportunities fund

The second fund of its kind, which exceeded its target, will focus on corporate direct lending and asset finance investments.

UBS O’Connor, the hedge fund manager within UBS Asset Management, has closed its second private credit strategy at $1.7 billion, according to news release.

The Clover Private Credit Opportunities II was oversubscribed to its initial fundraising target of $1.6 billion and was launched in August 2020. The fund’s total capital base is expected to be $2.5 billion, including anticipated leverage, the firm said.

“Our private credit opportunities strategy focuses on senior secured transactions across corporate lending and asset finance,” said Baxter Wasson, co-head of O’Connor Capital Solutions, in an email to Private Debt Investor.

“After the success of Fund I, which is now fully invested and delivering on target returns, we had strong demand from investors as well as continued strong demand from borrowers for the types of solutions that we provide,” Wasson added.

The new strategy, which will invest between $20 million and $200 million, sees the US as its core market but is expanding into Europe for investments. It received backing from both existing and new investors including pension funds, insurance companies, high net worth individuals, family offices, funds-of-funds and foundations in North America, Europe and Asia.

UBS O’Connor’s capital solutions team, which manages the strategy, has raised more than $3 billion in commitments across multiple vehicles since its founding in 2015. The team invests across corporate credit, asset finance, real estate and other illiquid collateral in multiple jurisdictions, industry sectors and different parts of the capital structure.

New York-based UBS O’Connor is a multi-strategy hedge fund manager within UBS Asset Management that focuses on value investing and risk management. It manages more than $10.8 billion in assets, as of 1 December 2021.