Firm: Aurora Capital Group LLC
Fund: Aurora Resurgence Fund II LP
Amount Raised: $550 million
Placement Agent: None
Los Angeles-based Aurora Capital disclosed that the Aurora Resurgence Fund II LP had attracted commitments from 27 investors. The firm’s distressed-investing affiliate, Aurora Resurgence Management Partners LLC, raised $636 million for its inaugural pool, the 2007-vintage Aurora Resurgence Fund LP, according to the Thomson One private equity database.
Aurora Capital, founded in 1992 by by Gerald L. Parsky, who had served as an assistant secretary of the Treasury in the Ford administration, typically invests in businesses with revenue of more than $100 million, seeking to invest $25 million to $100 million per transaction. The firm targets a variety of sectors, including aerospace and defense, energy, healthcare, industrial services, software and tech-enabled services and specialty manufacturing and distribution.
Aurora Capital formed the Aurora Resurgence affiliate to navigate the disruptions that it anticipated following the mid-decade boom era of 2006 to 2009, as Parsky told Buyouts last year. Resurgence, seeking mid-market companies facing operational or financial challenges, is an active investor in existing debt and equity obligations, including bank debt, bonds, trade claims, public and private equity, according to its website. As of June 30, 2013, the fund, more than 80 percent drawn, was earning a 1.7x investment multiple and an IRR of 17.2 percent, according to investor Oregon Public Employees Retirement Fund.
That placed Aurora Resurgence among the top-performing funds of the 2007 vintage, as Buyouts reported last year. As Parsky said in an interview at the time, “there were a number of transactions done with debt in 2006 and 2007 where the covenants were pretty light in terms of the ability of companies to avoid breaching them. But after one or two years the covenants got tighter. We thought if we were patient several of these companies might breach those covenants. Some might go into bankruptcy. Both happened, and we were prepared to buy into the fulcrum securities as a way to gain control.”
The California Public Employees’ Retirement System, the largest U.S. pension plan, has agreed to sell its anchor stake in the 2007 fund to a group led by The Carlyle Group LP’s AlpInvest Partners NV, Bloomberg Businessweek magazine reported in September. CalPERS committed $400 million to the vehicle, Buyouts has reported. But a number of executives have recently departed Aurora Resurgence, including Anthony DiSimone, who led a group in forming a new firm, Peak Rock Capital LLC, a startup buyout shop in Austin, Texas, which recently closed on an inaugural fund at $700 million.
Parsky is heading fundraising efforts for the new Aurora Resurgence fund, along with Steven Smith and Ryan McCarthy, Bloomberg Businessweek reported. Smith, the managing partner at Resurgence, was previously global head of restructuring at UBS Investment Bank, according to the firm’s website, while McCarthy, a partner in the firm, was formerly a senior director at the turnaround consultancy Alvarez and Marsal.
The firm listed no placement agent for its new fund. Executives at Aurora Capital did not respond by deadline to a request for comment.