The fund significantly surpassed the size of Shoreline’s first fund, which garnered $178.2m of commitments in 2008. The firm has already invested over one third of the new fund’s committed capital.
The new fund, Shoreline China Value II, received commitments from limited partners across North America, Europe, Asia and the Middle East. Investors include endowments, foundations, pensions, funds-of-funds, family offices and high-net-worth individuals.
Since the firm’s inception in 2004, Shoreline has focused on credit-related opportunities arising from the inefficiencies in China’s financial system, including debt restructurings, non-performing loan portfolios, structured special situations financings and distressed private equity and real estate.
Benjamin Fanger, co-founder & managing director of Shoreline Capital, said, “China’s financial system allocates capital inefficiently, leaving many good companies without financing and bad companies with too much debt. The former produces special situations opportunities while the latter gives rise to distressed debt. Now that China is facing a slowing growth rate, these types of opportunities have multiplied. Since 2004 Shoreline has established a local team to source, structure and execute such transactions in China.”
So far, Shoreline has invested over one third of the new fund’s committed capital in five investments, including one loan portfolio and various special situations. Such special situations are generally asset-backed rescue financings that allow companies to bridge periods where they cannot get bank loans. “The continuing inefficiencies in China’s financial system generate a healthy deal flow for Shoreline. We are excited about the opportunities,” Fanger added.
“Investing in China is no longer about just getting on the bus. It takes more time, effort and local experience to ascertain the true status of a Chinese company and navigate China’s financial and legal environments. We believe the significant support from new and existing investors indicates their confidence that Shoreline possesses this experience.”
Shoreline was founded in 2004 and manages close to $500m of capital in portfolios of non-performing loans, restructured single credits, special situation financings, distressed private equity and real estate. Prior to 2008, Shoreline Capital sourced and serviced over $1.6bn of Chinese non-performing loans in one-off deals for third party investors. It closed its first discretionary fund on $178.2m in 2008.
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