Z Capital Seeks $500 Million for Fund II: UPDATED

Z Capital Partners is fundraising for its second special situations fund.

Lake Forest, Ill.-based Z Capital is looking to raise $500 million, according to an SEC filing dated Dec. 31. Jefferies & Co. is the a placement agent for Z Capital Special Situations Fund II LP, the filing says.

News of the fundraising was previously reported by Dow Jones LBO Wire.

Z Capital focuses on making controlling investments in distressed companies including turnarounds, restructurings and bankruptcies. The firm, which also has a New York office, has invested in Mrs. Fields Famous Brands, Real Mex (which filed for Chapter 11 in November 2011 after being owned by Sun Capital Partners) and Affinity Gaming.

Z Capital closed on $300 million with its first special situations fund in 2009, LBO Wire says. The initial target of Fund I was $1 billion, which was revised to $500 million, Private Equity International says. William Monagle, a former partner and senior strategist of the New England Pension Consultants, was named a  Z Capital MDin November. UPDATE: Z Capital’s target for Fund I was $500 million and not $1 billion, a person close to the fundraising says.

James Zenni, Z Capital’s president and CEO, founded the firm in 2006. He is the former president, managing partner and 50% equity owner of Black Diamond Capital Management, which he founded in 1995, the Z Capital website says.

Officials for Z Capital declined comment.

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