Preqin data reveals that there are currently 54 distressed private equity vehicles raising globally targeting an aggregate USD 45.3bn in capital commitments. The largest distressed private equity fund currently on the road is OCM Opportunities Fund VIII, a distressed debt fund focusing on investments in the US. The fund is seeking USD5bn in capital commitments.
In terms of geographic focus US-focused distressed private equity vehicles are the most numerous ones with 33 funds targeting an aggregate USD 35.6bn in capital commitments. These are followed by 12 European funds seeking to raise an aggregate USD 5.3bn. Asia and Rest of World–focused vehicles account for 16.7%of global distressed private equity funds in terms of number of funds and 9.7% in terms of aggregate capital being sought. There are 9 Asia and Rest of World–focused funds currently on the road targeting an aggregate USD 4.4bn.
Data from Preqin’s Funds in Market product shows that so far this year 10 distressed private equity funds have reached a final close. They garnered an aggregate USD 9.6bn in capital commitments. The largest fund to reach a final close was OCM Principal Opportunities Fund V which closed in February 2010 on USD 3.33bn, exceeding its target by just over 10%. OCM Principal Opportunities Fund V's objective is to obtain control (or significant influence) of primarily middle-market companies, preferably via the purchase of distressed debt and, when such distress-for-control opportunities are not available, through private equity investments. The second largest distressed private equity vehicle to have closed this year was Apollo European Principal Finance Fund. It is an investment vehicle that seeks to generate attractive risk-adjusted returns by capitalizing on opportunities in the non-performing loans sector in Europe. The fund closed on EUR 1.4bn. The third largest distressed private equity fund to close in 2010 YTD was ICG Recovery Fund 2008. It closed on EUR 843mn. The fund focuses on purchases of attractively priced LBO loans via the secondary market in performing companies; and providing financing solutions to operationally sound companies whose balance sheets are burdened by excessive amounts of debt.
For more information on private equity fundraising, please see Preqin’s Funds in Market