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Cargill’s CarVal shatters target for third credit fund

Firm: CarVal Investors

Fund: CVI Credit Value Fund III

Amount raised: $3 bln

Target: $2 bln

CVI Credit Value Fund III beat its original fundraising target of $2 billion with support from Cargill and more than 80 LPs to invest in “undervalued opportunities” with a focus on whole loan portfolios coming out of the deleveraging of European banks, according to a source. 

“CVF III is carying forward a similar investment strategy … [by] investing across our core credit strategies or ‘four boxes’ of loan portfolios, corporate securities, liquidiations and structured credit,” John Brice, president and chief investment officer of CarVal Investors, said in a prepared statement.

Given the opportunities in Europe, the fund will be weighted toward loan portfolios out of the gate, but it will be balanced with corporate securities and structured credit during the second half of the investment period “as the recovery ends and the dislocation of the next market cycle begins,” Brice said.

A spokeswoman for the firm declined to comment.

Fund III raised $700 million more than the $2.3 billion in commitments for CVI Credit Value Fund II, which closed in August of 2013.

The senior credit team overseeing Fund III includes Lucas Detor, Jody Gunderson and James Ganley, all senior managing directors.

The Hopkins, Minnesota-based firm hired Jerry Keefe as managing director reporting to David Chene, who leads CarVal’s corporate securities investments in North America. Keefe was formerly co-head of the distressed debt trading group at Goldman Sachs.

CarVal also hired Roger NewKirk from UBS as a director on its its emerging market credit team, reporting to Joseph Graf, senior managing director. 

In February, CarVal hired four high-yield credit traders from Macquarie: James Horn, Carlo Portes, Gabriel Szerda and John Withrow. Withrow’s is managing director, while Portes and Szerda are directors and Horn is vice president.

CVI Global Value Fund A LP delivered an IRR of 16.6 percent as of February 28, 2014, for the University of Texas Investment Management Co. Other LPs in that fund include the California Teachers’ Retirement System and Texas County & District Retirement System.

CarVal investors traces its roots to 1987 as part of Cargill’s financial trading operation. It became an independent subsidiary of Cargill in 2006.