Preqin’s comprehensive Fund Manager Profiles database reveals 608 private equity firms are considering distressed private equity investments. Out of distressed debt, special situations and turnaround investments, turnaround is the most preferred by these firms, with 327 fund managers considering investments of this kind. This is closely followed by event driven distressed private equity, with 321 firms considering special situation investments. Two hundred and twenty nine firms consider distressed debt investments.
Fifty-four percent of the 608 private equity firms considering distressed private equity are based in the US. The UK also has a large base of firms considering investing in distressed private equity, with 11% based in the country. These firms have collectively raised $987bn in the last ten years, which includes other investment strategies as well as distressed private equity, and have an estimated $254bn in uncalled capital.
TPG is the largest private equity firm to consider all three distressed private equity strategies, and has raised a total of $54bn across all its investment strategies in the last 10 years, which includes buyout and growth. Although distressed private equity investing is not their predominant focus, the firm considers investments in this region as a way of diversifying their investment strategy from pure acquisition and growth investments. TPG, established in 1992 and formerly known as Texas Pacific Group, raised its latest distressed private equity fund, TPG Opportunities Partners II, in October 2012. The distressed debt fund garnered $2.1bn, $600mn above target, and focuses on investments in non-performing loans, distressed-for-control and special situations on a global basis.
Kohlberg Kravis Roberts predominantly makes buyout investments and has raised a total close to $60bn in the last 10 years. The firm is currently raising its first special situations fund, KKR Special Situations Fund, which has a target of $1bn. Aside from buyout funds, the firm has also raised both a mezzanine and natural resources fund.
Oaktree Capital Management, one of the most well known distressed private equity investors, has raised a series of distressed debt and special situations funds, focusing on investments across the globe. The firm has also made buyout and mezzanine investments as a way of diversifying their investment strategy. It was established in 1995 and has raised a total of $53bn in the last decade, with nearly $13bn in estimated dry powder. Its latest fund to close earlier in 2012 was the Oaktree Opportunities Fund IX, a distressed debt fund which garnered $5bn.