UK private equity firm Alchemy Partners has raised £500m (€568m) to invest in European distressed companies, the largest vehicle raised for the purpose since the financial crisis.
According to the Financial Times, the firm’s second “special opportunities” fund is to invest in the debt and equity of private and public companies in the UK and Europe over the next four years.
The firm’s strategy for the fund is expected to be similar to that of its previous turnaround fund, which closed on £300m (€340.8m)in 2006, but with a lock-up of seven years as opposed to five.
A key driver for opportunities is said to be the region’s banks, which are expected to offload assets and reduce their balance sheets.
European distressed assets have attracted global attention recently, with KKR relocating its US co-head of special situations to London, and German firm Capital Management Partners closing a €175m fund focused on turnaround investments in the country last week.
In contrast, US firm Oaktree Capital made the decision to return $3bn of the $10bn it raised from LPs to invest in distressed US companies, and is in the process of raising its third European turnaround fund.
Alchemy’s distressed fund is the first since the acrimonious departure of founder Jon Moulton, who left the firm in September 2009, a year before he was due to retire. Moulton has since founded a new firm, Better Capital, and is said to be raising £200m (€227.2m) to invest in cleantech.
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