Woodman seeks up to $150m for third fund

The Switzerland-based asset manager expects to hold a first close at the end of the year.

Woodman Asset Management has launched its third private debt fund of funds, Credit Opportunities III, the firm said.

The Zug-based manager is seeking $100 million-$150 million for the fund and expects to hold a first close at the end of 2015, PDI understands. A final close is expected a year from now.

The fund’s capital will be invested across the US, Europe and Asia. The strategy will focus on direct-lending funds, risk-sharing portfolios and special situation funds.

Commenting on allocation for the third fund, Stefan Armonat, portfolio manager at Woodman, told PDI: “We define a top-down allocation strategy based on how we see the market developing. There is a lot of movement in the market. We certainly can say we are lightening up on direct lending and moving more towards special situations.”

Capital invested in direct-lending funds will extend credit to corporate and real estate borrowers directly. The risk-sharing strategy will aim to benefit from the regulatory arbitrage of banks trying to reduce capital. Woodman will also look to access niche opportunities that pose significant value potential after dislocations in the market.

Armonat said in a statement: “Private debt still provides an attractive investment opportunity that we want to take advantage of. In a low yielding environment, private debt investments are instruments to generate an attractive return with a significant current income component and strong downside protection.”

Woodman is seeking the same net internal rates of return of 12-14 percent as it did for its previous credit opportunities funds. It is accepting minimum investments of $2 million for its third fund.

“The return characteristics are a result of the readiness to lock up investments and give borrowers a longer planning horizons, as well as the dislocations in the credit capital markets resulting from regulatory disruptions,” Armonat added.

Woodman closed its second fund Credit Opportunities II on 30 June on $154 million.

The multi-family office accepted some external clients that wanted to invest together with the firm’s beneficial owners. The manager closed its first fund on $85 million two years ago.