Centerbridge Corrals $467M for Credit Play
Centerbridge Partners held an interim close on a new debt fund, locking down commitments from 37 investors so far.
June 22, 2009
Centerbridge Partners held an interim close for a new debt fund, Centerbridge Special Credit Partners LP, corralling more than $450 million for the vehicle. The new fund will ostensibly sit alongside the firm’s $3 billion private equity vehicle, Centerbridge Capital Partners, and its similarly titled distressed debt vehicle, Centerbridge Credit Partners, which targets non-control investments in leveraged loans, high-yield bonds structured products and other related securities.
The new fund, which accepted its first commitment in early June, did not specify a target or hard cap in its Form D filing with the Securities and Exchange Commission. The fund, to date, has closed on $467.15 million, lining up commitments from a total of 37 investors so far.
Centerbridge is also in the market with a follow-on effort for its legacy distressed debt fund, Centerbridge Credit Partners. This vehicle was originally capped at $2 billion, but the fundraising was reopened amid growing demand and opportunity.
It’s uncertain how the “Special Credit” fund will differ from the firm’s original Credit vehicle. It is possible that the new fund could seek control positions through debt investments, as the firm identifies the vehicle as a “private equity fund” in the SEC filing.
Calls to Centerbridge, the firm’s legal counsel, and Park Hill Group, the placement agent listed in the SEC filing, were not immediately returned by press time.
Centerbridge was formed in 2006 and was an immediate hit with investors. The firm, since its launch, has been characterized as a private equity / hedge fund hybrid, reflecting the backgrounds of its founders Mark Gallogly, formerly of Blackstone Group, and Jeffrey Aronson, who oversaw Angelo, Gordon’s leveraged loan business prior to forming Centerbridge.
Since closing its first fund, the firm has primarily targeted turnaround plays and distressed buys in the industrials and manufacturing space. In 2007, it acquired agricultural equipment manufacturer The GSI Group from Charlesbank Capital, and that same year, poured $500 million into bankrupt auto parts maker Dana Corp. Centerbridge also acquired Greatwide Logistics Services alongside DE Shaw, wresting control of the company out of bankruptcy through a position in the first-lien debt.
Centerbridge has also managed to avoid some major pitfalls, and reportedly failed in its bid to acquire Chrysler, losing out to Cerberus Capital Management.
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