Centerbridge Partners, the somewhat secretive buyout firm that made headlines with its recent investment in BankUnited, last month closed on $460 million toward a “Special Credit Partners” fund with an undisclosed target. The fund had 37 investors at the time and serves as a follow-up to the firm’s first hedge fund-buyout fund hybrid vehicle, Centerbridge Capital Partners LP, a $3.2 billion pool raised in 2006.
Somehow in the last few weeks, the firm has nearly doubled that amount, filing a Form D this week listing $850 million commitments from 40 investors. That’s just three more than its prior close, which indicates those three investors committed a total of $390 million. Not bad. The fund is designed to invest in distressed debt and according to a report, has a $2 billion target.
Distressed debt wouldn’t be an entirely new strategy for the firm, which was created by former Blackstone Group and Angelo Gordon pros. The firm paid invested in the debt of now-bankrupt Extended Stay. Other control deals include paying $500 million for bankrupt auto parts company Dana Corp. and acquiring bankrupt Greatwide Logistics Services. The firm probably counts its blessings each day that Cerberus trumped its 2007 bid for Chrysler, since it’s a safe bet this fundraise would be slightly more difficult with a stain like Chrysler on the PPM.
Park Hill is the firm’s placement agent. Past investors include CalSTRS, PSERS, New Jersey, and University of Texas. The firm didn’t return calls.