Centerbridge nears $2.2bn for Fund II

Centerbridge Partners II, which is targeting $3.75bn, could hold a final close toward the end of the first quarter next year.

Centerbridge Partners will collect between $2.2 billion and $2.5 billion by the end of the year for its second fund, a significant jump from the more than $1 billion the firm raised for its first close in November, according to people with knowledge of the firm.

Centerbridge Partners II, targeting $3.75 billion, launched in July, and one market source said the fund has seen strong demand from potential limited partners. US public pensions including Oregon, the Texas County & District Retirement System and the Nashville & Davidson County Metropolitan Employee Benefit System have all made commitments to the fund.

The fund could hold a final close toward the end of the first quarter next year, a source told PEO. Centerbridge declined to comment.

Centerbridge’s first fund, which closed on $3 billion in 2006, was generating a 1.26x total value multiple and an 18.1 percent internal rate of return as of 30 June, according to performance numbers from Oregon’s state pension system.

Centerbridge Partners II will make investments of $50 million to $300 million in North America. The fund, which has not yet started investing, will focus on buyouts, corporate partnerships, recapitalisations and add-ons.

The firm has deployed two-thirds of invested capital in distressed debt opportunities, and one-third into private equity partnerships, according to information from the Oregon Investment Council, which committed $100 million to the fund in October.

The firm was formed in 2006 by Mark Gallogly, former executive at The Blackstone Group, and Jeffrey Aronson, a former distressed securities expert from hedge fund Angelo Gordon.