CVC beats target with special situations fund

CVC offices in London

CVC offices in London

The firm has beaten its fundraising target on its latest vehicle, a special situations fund that marked the second bumper fundraising close in as many days after Apax Partners held a first close on a $ 7.9 billion vehicle.

CVC’s fund, which will focus on providing stressed and distressed corporate credit to businesses across Europe, has raised roughly €650 million, surpassing its €600 million target, CVC said in a June 30 statement. Fundraising began in the fourth quarter of 2014.

No other special situations fund has closed globally at a bigger size in 2016, according to Preqin. The CVC close ranks behind only the $ 1 billion that London-based private equity firm Broadwell Capital said on June 29 it had raised for its first Tactical Opportunities fund, which is not included in the Preqin data.

The new fund will boost CVC’s total war chest for credit opportunities and special situations investing to over €2.5 billion.

Mark DeNatale, global head of special situations at CVC, cited the UK’s recent decision to leave the EU as a potential boost to the investment backdrop, saying in the statement: “We believe the structural changes across the European banking landscape, potentially impacted by the recent UK referendum result, have created attractive investment opportunities for disciplined investors, like ourselves.”

Ongoing volatility across Europe has caused banks to become increasingly cautious, leading them to rein in lending, and coupled with regulatory changes has driven them to sell off non-performing loans on their balance sheets, with CVC among the institutions looking to take the advantage of the uncertain economic environment by snapping up those assets.

There are currently 29 special situation-focused funds in the market chasing $ 13.9 billion in capital, up from 25 funds in the market in March 2016, according to Preqin. Apollo Global Management said in March it was looking to raise $ 750 million for its first special situations vehicle. The largest special situations vehicle being raised is Hayfin Capital Management’s Special Opportunities Credit fund II, which is targeting $ 1.67 billion.

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