Centerbridge plans final close on $6 bln for October

  • Expects to close Fund III at hard cap this fall
  • PSERS commits up to $100 mln to Fund III
  • Also separately managed Park Square account

Pennsylvania Public School Employees’ committed up to $100 million to Fund III at its Aug. 7 meeting. Centerbridge declined to comment on fundraising.

The firm set a $5.75 billion target for Centerbridge Capital Partners III. The general partner will commit at least 2 percent of the aggregate capital commitments to Fund III, according to the Pennsylvania Public School Employees’ report.

The fund employs an “all weather” strategy that allows the firm to make control investments in distressed-for-control deals as well as more conventional private equity transactions. Centerbridge will invest Fund III in companies located in the United States and Western Europe.

Fund II, a $4.4 billion 2011 vintage pool, had netted a 1.1x multiple and 6 percent internal rate of return through March 31, according to the report. The firm’s 2007 debut fund had generated a 2.2x net multiple and 23 percent net IRR.

The firm was founded in 2005 by former Angelo, Gordon & Company partner Jeffrey Aronson and Mark Gallogly, who was a senior managing director at The Blackstone Group.

In addition to its commitment Centerbridge, Pennsylvania Public School Employees’ committed up to $100 million to Tenaya Capital’s latest venture capital fund, which is targeting $350 million with a $450 million hard cap.

The retirement system is a limited partner in Tenaya’s three previous funds. The firm’s 2012 vintage has yet to make any distributions as of March 31, according to Pennsylvania documents, but its 2007 fund had net a 1.9x multiple and 21.5 percent IRR.

The Portfolio Advisors investment memo indicated that the firm would hold a dry close in October, with its first capital scheduled for June 2015. Tenaya declined to comment.

The $51.4 billion retirement system also made several commitments to debt and credit-related funds at the meeting, including an initial commitment of up to $200 million to a fund-of-one managed by Park Square Capital. The fund will have the same strategy as Park Square’s Credit Opportunities II Fund, which invests in the senior and subordinated debt of European companies.

Pennsylvania Public School Employees’ made two $200 million initial commitments to high yield and absolute return funds managed by Brigade Capital Management and Oceanwood Capital Management at its Aug. 7 meeting as well.

The retirement system’s private equity portfolio was valued at $8.3 billion as of March 31. Pennsylvania Public Schools’ has a 16.6 percent allocation to the asset class.