Preqin’s Funds in Market online service shows that of the 155 private equity fund of funds vehicles currently in market, 18 plan to make commitments to special situations vehicles. Special situations funds aim to exploit pricing inefficiencies within event driven or complex situations, typically involving company restructuring, or the resolution of the complex situation in order to restore a company’s true value. These 18 special situations vehicles are targeting an aggregate $5bn, representing a significant capital injection into this fund strategy. The majority have an overall fund focus on North America (67%), while the remainder have a focus split equally between Europe and emerging markets.
The largest fund of funds vehicle currently in market with a preference for special situations is Adams Street 2015 Global Fund, which is targeting $800mn and has a hard cap of $900mn. The fund, raised by Adams Street Partners, will allocate two-thirds of committed capital to primary commitments, and will also make some secondary and direct investments. It will commit to special situations, buyout, venture capital, mezzanine and distressed debt funds across Europe, North America and Asia.
Superior Private Equity I is the second largest fund of funds vehicle currently in market targeting commitments to special situations funds. The vehicle, raised by Superior Private Equity, has a target size of $500mn and a hard cap target of $600mn. It will commit to US-focused special situations, buyout and distressed debt vehicles and will primarily make primary and secondary investments, as well as some direct investments.
Mesirow Financial Private Equity Partnership Fund VI is also targeting a final close of $500mn, having held a first close in July 2011 on $30mn. The firm will commit up to 80% of committed capital to US-focused funds, and up to 25% to Europe-focused funds; it will make primary, secondary and direct investments and will target buyout, venture capital and special situations vehicles.