Insight

Värde blows past $1 bn target for covid dislocation fund

The Värde Dislocation Fund raised $1.6 billion, surpassing its $1 billion goal. It has a flexible mandate to invest in opportunities created by economic disruption.

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Värde Partners has raised $1.6 billion for a strategy focused on dislocation opportunities stemming from the covid-19 pandemic.

The Värde Dislocation Fund was raised in just five months following its first close in June at $900 million and exceeded its initial $1 billion target.

The firm said investor demand led to the launch of the vehicle, which had not been planned prior to the covid-19 pandemic.

“The strong demand for this strategy from a diverse, global investor base underscores expectations for a deep credit cycle,” said Jon Fox, Värde president. “We are pleased to see 55 percent of commitments to this fund come from new investors, notwithstanding it was raised entirely with no in-person meetings.”

The fund attracted at least 59 limited partners as of August, according to a previous Buyouts report. LPs include the North Dakota Board of University and School Lands, which committed $100 million, San Antonio Fire and Police Pension Fund ($20 million), and the University of Vermont endowment ($10 million), Buyouts previously reported.

The fund will invest in opportunities resulting from the market dislocation and economic disruption caused by the pandemic and has a flexible mandate to invest globally in a broad range of mispriced, stressed and distressed credit.

“The unparalleled speed and disruption to society and markets has caused fundamental damage to the global economy,” said Ilfryn Carstairs, co-chief executive officer and chief investment officer. “The range of potential outcomes remains incredibly wide, and we expect varying degrees of impact around the world.”

The fund aims to deploy its capital within 18 months and has already made “significant” investments.

It follows the raising of a $1 billion dislocation fund by Värde earlier this year through a private banking platform, giving the firm $2.6 billion of firepower to invest in opportunities created by the pandemic.

In December last year, Värde closed its 13th flagship fund with $2.47 billion, beating its $2 billion target.

This article first appeared in sister publication Private Debt Investor