Monarch heads for $1bn on distressed fund in economic downturn

The fund hit the market in January so it already built up momentum prior to fundraising slowing in the coronavirus-fueled downturn.

Monarch Alternative Capital, a distressed debt investor, is heading for a $1 billion first close on its fifth fund, according to a person with knowledge of the firm. 

Monarch, based in New York, could raise up to $2 billion for Fund V. Park Hill Group is working as placement agent on the fundraising. 

The fund hit the market in January, the person said, so it has already built up momentum prior to fundraising slowing down in the coronavirus-fueled downturn.

Monarch, formed in 2002, will hit the market with its first close with a fresh pool of capital, ready to seize on what could be a historic opportunity for distressed investing. The raging coronavirus pandemic has shut down businesses and populations around the globe, causing economies to aggressively contract. 

As revenues dry up, especially for the hardest hit industries in travel, retail and energy, significant pockets of distressed companies will emerge, sources have told Buyouts

This will range from portfolio companies that just need an equity infusion to help tide them through the worst of the downturn, to those companies where the sponsor hands the keys over to lenders. 

Monarch, like other distressed investors, focuses on investments in bank loans, public and private corporate bonds, municipal and sovereign debt, asset-backed securities, equity securities received through restructurings, private equity and real estate, the firm’s Form ADV said.

The firm raised more than $1 billion for its third and fourth fund platforms, according to Form D fundraising filings in June 2019. The firm was formed by chief executive officer Michael Weinstock and managing principals Andrew Herenstein and Christopher Santana. 

Action Item: Check out Monarch’s Form ADV here: https://bit.ly/3e97Tyg