The global economic and financial climate is providing evermore opportunities for distressed private equity investment. Preqin’s Funds in Market product shows that there are a total of 66 distressed private equity vehicles currently on the road seeking an aggregate $50.1bn in investor capital. These funds, which make special situation, distressed debt and turnaround investments, have raised a total of $7.6bn towards the aggregate target through 29 funds holding interim closes.
With respect to geographical focus, just over half of the distressed private equity funds currently in market focus their investment within North America. A further 17 target opportunities predominantly in Asia and Rest of World, with the remaining 15 funds mainly seeking investments across Europe. The North American-focused funds are targeting just over 70% of the total capital being sought, with these funds seeking $35.1bn in LP commitments. Asia and Rest of World-focused vehicles are seeking $4.7bn of the aggregate total, and the funds that are targeting investments mainly across Europe are targeting a total of $10.3bn. In terms of fund manager location, 43 of the distressed private equity funds in market are being managed by GPs based in North America, 13 by managers based throughout Europe and the remaining 10 by fund managers based across Asia and Rest of World.
The largest distressed debt fund in market is the Oaktree Opportunities Fund IX, which is targeting $4bn and seeks opportunities in a diversified range of sectors across North America and Europe. Pegasus Partners V fund is the largest special situations fund seeking investor capital, which predominantly targets investments in the energy, utilities and industrial sectors throughout the US, and is seeking $1.5bn in capital.