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Distressed Debt Funds in Market

by Laura Duce

  • 02 Jul 2012
  • PE

Preqin’s Funds in Market product shows that there are currently 28 distressed debt investment vehicles on the road collectively seeking $33.9bn in capital commitments. Of these funds, 16 will mainly focus on North American investments, eight will primarily invest in European opportunities, and four will predominately focus on Asia and Rest of World. Seventy-nine percent of all distressed debt funds in market are being raised by US-based fund managers, accounting for nearly 96% of the aggregate capital being sought.

Of these 28 distressed debt funds in market, 15 have already held at least one interim close, raising an aggregate $6.2bn. Five of these have held an interim close since the beginning of 2012. The average target size of all distressed debt funds currently raising is approximately $1.2bn.

The three largest distressed debt funds in market are Oaktree Opportunities Fund IX, Cerberus Institutional Partners (Series Five), and Apollo European Principal Finance Fund II, which are targeting $4bn, $3.75bn and €2.5bn respectively. Oaktree Opportunities Fund IX will focus on North America and Europe, and Cerberus Institutional Partners (Series Five) will make investments in North America, Europe, and Asia. Apollo European Principal Finance Fund II focuses its investments solely on Europe. All three have a diversified industry focus.

Over the past 12 months, 13 distressed debt vehicles have held a final close, collecting total commitments of over $10.8bn. The average final close size of these funds is $832mn, and 10 of these 13 funds were raised by US-based fund managers. Nine of the 13 have a North American focus, accounting for approximately 90% of capital commitments.

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