Centerbridge Partners unveiled a fourth flagship offering with a $6 billion target just weeks after co-founder Jeff Aronson officially took charge of the formerly jointly run firm.
Centerbridge this month filed a Form D fundraising document for Centerbridge Capital Partners IV, disclosing the target. It is seeking roughly the same amount raised by the fund’s predecessor, closed in 2014 above a $6 billion hard cap.
No commitments were secured as of the date of the filing. Fund IV has, however, received pledges from two returning pension systems. Los Angeles County Employees’ Retirement Association said it is committing $150 million, while Oregon Investment Council approved a $250 million investment.
Lazard is among the placement agents for Fund IV.
Centerbridge was founded in 2005 by Aronson and Mark Gallogly, starting operations the following year, according to its website. Aronson was previously an Angelo Gordon partner responsible for distressed securities and leveraged loan activity. Gallogly hailed from Blackstone, where he was a senior managing director and head of private equity.
In 2019, Gallogly informed limited partners of his plans to retire, leaving Aronson as Centerbridge’s sole managing principal. The transition was slated to happen in October, the firm’s ADV filings said. Aronson will remain in the role for at least five years, the Wall Street Journal reported last November.
Gallogly continues to be identified on Centerbridge’s website as co-founder and managing principal. The firm did not respond to a request for comment.
Aronson and Gallogly established Centerbridge to be a multi-strategy investor. A private equity platform was launched in 2006, and a credit, distressed and special situations platform added a year later. In 2017, the firm waded into real estate investing through an inaugural dedicated pool.
Centerbridge’s PE strategy emphasizes buyout and distressed-for-control investments in companies based in North America and Europe. From offices in New York and London, opportunities are sourced primarily in consumer, financial services, healthcare, industrials, real estate and technology, media and telecom sectors.
The strategy is described by Centerbridge as “all-weather” because of an ability to bridge PE and distressed investments, allowing it to adapt to different market conditions. This implies a potential current focus on distressed opportunities arising from efforts to halt the spread of covid-19. This may also be a top focus of Fund IV.
Centerbridge is also marketing a fourth private credit offering with a $5 billion target, Reuters reported earlier this year.
Centerbridge has been highly active on the deal front of late. In September, it teamed up with Vistria Group to acquire Help at Home, a provider of in-home care to seniors and persons with disabilities, for about $1.4 billion, Buyouts sister title PE Hub reported. The seller, Wellspring Capital Management, will retain a minority stake.
Other recent deals include Centerbridge’s agreement to buy Ahead, a provider of enterprise cloud solutions, from Court Square, and its agreement of buy American Bath Group, a maker of showers, bathtubs and related accessories, from Lone Star Funds. Most recently, the firm this month elected to partner with Ahold Delhaize to acquire FreshDirect, an online grocer.
Centerbridge Capital Partners III was generating a multiple of 1.3x and a net IRR of 13.7 percent as of March, according to a report by California Public Employees’ Retirement System.
Action item: See Centerbridge Partners’ ADV filings here.