Strategic Value Partners collects $322 mln for first close

Firm name: Strategic Value Partners

Fund name: Strategic Value Special Situations Fund III

Target: $1 billion

Strategic Value Partners did not return a request for comment.

The fund, Strategic Value Special Situations Fund III, launched this fall. Strategic Value Partners principals and affiliates have committed $35 million to the first close, the person said.

Part of the first close funding includes a pledge from a pension fund that has formed a strategic account with the firm, the person said. The pension fund, which the source declined to name, made a “significant” investment to Fund III and is investing capital across the firm’s platform. The strategic account is expected to grow to around $700 million over the next three years, the person said.

Fund III will continue Strategic Value Partners’ strategy of investing primarily in the distressed debt of middle-market companies and assets.

Strategic Value Partners was formed in 2001 by Victor Khosla, who spent time in distressed investing at Citibank, Merrill Lynch and Cerberus Capital Management. The firm manages $3.6 billion.

The firm’s Fund I generated a 17.7 percent net internal rate of return and a 1.7x multiple of invested capital since inception as of June 30, a source told Buyouts in a prior interview. Fund I closed on $346 million in 2009.

Fund II, which closed on $918 million in 2012, was producing a net IRR of 16.7 percent, Buyouts reported.

Chris Witkowsky is editor of peHUB