Black Diamond raises $688 mln for fourth in series of distressed debt funds

Firm: Black Diamond Capital Management

Fund: BDCM Opportunity Fund IV LP

Target: $1 bln

Amount raised: At least $688 mln

Placement agent: Credit Suisse

The Greenwich, Conn.-based firm seeks $1 billion to invest in middle-market chemical, farming, steel, forest products and hospitality companies, according to limited partner documents. 

The form D filed for BDCM Opportunity Fund IV lists a date of first sale of Dec. 3, 2014, with $688 million raised from 60 LPs. Meanwhile, a separate filing for BDCM Offshore Opportunity Fund IV lists $126.5 million in commitments. It is not clear if the offshore dollar amount is included in the larger figure or is in addition to it.

Black Diamond Capital did not return a phone call. The firm manages several kinds of funds: control-style distressed debt funds, hedge funds, mezzanine funds, collateralized loan obligations and other structure vehicles, according to the firm’s website.

With Fund IV, the firm seeks to raise $200 million more than its predecessor, BDCM Opportunity Fund III, which drew in $800 million in six months of fundraising back in 2011.

With offices in Lake Forest, Ill and London, Black Diamond Capital listed $8.3 billion in assets under management and 80 employees, according to the firm’s Form ADV filed on March 31. The firm listed between 26 and 100 clients, with two-thirds of those outside the United States.

Among LPs for BDCM Opportunity Fund IV, the Los Angeles City Employees’ Retirement System committed $25 million. New Mexico State Investment Council committed $75 million in January, and Kentucky Retirement System allocated $60 million to the fund late last year. Oregon Investment Council allocated $200 million to BDCM Opportunity Fund IV last year.

Oregon reported an IRR of 10.3 percent and investment multiple of 1.2x for the firm’s vintage 2011 BDCM Opportunity Fund III as of Sept. 30. The predecessor, BDCM Opportunity Fund II, produced an IRR of 17.2 percent and an investment multiple of 2.15x as of the same date. The vintage 2002 BDCM Opportunity Fund generated an IRR of 21.8 percent and an investment multiple of 2.65x.

The firm lists Stephen Deckoff as managing principal, Mounir Nahas as chief operating officer, and Samuel Goldfarb as its chief compliance officer, according to its Form ADV.

Deckoff co-founded of Black Diamond Capital in 1995, according to his biography on Bloomberg. Earlier he was a senior vice president at Kidder, Peabody & Co where he worked as head of the structured finance group.

Co-founder James Zenni left the firm in 2006 and launched Z Capital Partners.