Alchemy Partners targets £600m for Fund III

The UK-based firm, which is currently investing its £500m Alchemy Special Opportunities Fund II, published the PPM for its successor vehicle last week.

Alchemy Partners has hit the fundraising trail looking to collect £600m for distressed and special situations across Europe, according to a market source.

The firm is understood to have come to market last week, when it published its private placement memorandum. It aims to reach a first close at the end of the first quarter of 2015.

It is understood Probitas Partners is raising the fund. Both Alchemy and Probitas declined to comment.

Alchemy’s fund target is slightly higher than its second fund, a £500 million vehicle that it raised in 2011. Alchemy has until July 2014 to fully deploy this fund, the source said.

Investors in its previous vehicle include Greater Manchester Pension Fund, Industriens Pension, San Diego City Employees' Retirement System and Scottish Widows Investment Partnership, according to PEI’s Research and Analytics division.

Alchemy was founded in 1997 by Jon Moulton, Martin Bolland and Eric Walters. All three of them have since left the firm. Alchemy is currently led by Dominic Slade, Ian Cash and Frits Prakke.

Since inception it has invested £3 billion across over 130 transactions and made investments across Europe into a broad range of sectors and throughout capital structures, according to its website.

Alchemy is not the only firm raising capital for investments in companies that are suffering due to macroeconomic challenges. Rutland Partners, a UK-based turnaround firm, is also in market targeting £300 million for its fund III, PEI exclusively reported in July

Turnarounds and distressed are seen as an attractive bet by LPs in the current climate, one source told PEI at the time. Non-European LPs in particular are showing interest in these strategies, the source said. “They are looking at Europe as a place where they are more likely to invest in distressed/turnaround deals than in growth deals.”