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CVC closes debut distressed fund on $723 mln amid private debt surge

Firm: CVC

Fund: CVC Credit Partners Global Special Situations Fund

Target: 600 mln euros, or about $667 mln

Amount raised: 650 million euros, or $723 mln

CVC closed its first flagship distressed credit pool, CVC Credit Partners Global Special Situations Fund, with $723 million in commitments, beating its $667 million target by more than 8 percent.

It’s one of 28 debt funds that reached a final close in the second quarter alone, according to Preqin. The funds drew in a combined $16 billion in commitments, more than double the $7.8 billion raised in the second quarter of 2015, according to Preqin.

Mark DeNatale, partner and global head of special situations for CVC, said the pool will benefit from a six-year lockup. Many alternative funds, such as hedge funds, are often structured with quarterly redemptions for LPs as opposed to a years-long lockup.

“The investors are aligned with the GP for six years in order to realize the full value of the assets,” he said in a phone interview. “It gives us a runway to realize the value of assets over the next six years.”

DeNatale said the firm sees volatility from the Brexit vote and other factors continuing.

“We’ve had 12 months of significant volatility from the oil arena, foreign currency, sovereign interest rates, and over the next 12 to 36 months we’ll see more,” he said. “When we see volatility in the market and uncertainty, it definitely breeds opportunity in the distressed space for us.”

With a total of $14.4 billion in AUM and 38 investment pros, CVC Credit Partners also runs units for performing credit, as well as private debt investments.

Along with the $723 million for the fund itself, the credit-opportunities and special-situations units of CVC Credit Partners also manage about $2.1 billion in separate accounts for LPs.

Action Item: Debt pool data included in Preqin fundraising report:

Photo of Mark DeNatale courtesy of CVC