Centerbridge nears final close on Fund II

The firm, run by Mark Gallogly (pictured) and Jeffrey Aronson, will hit the hard-cap of $4.25bn on the second fund, which launched in July and had collected $2.5bn by January.

Centerbridge Partners is close to wrapping up fundraising on its second fund, which will hit its hard-cap of $4.25 billion and close by the end of this month, according to a person with knowledge of the firm.

Centerbridge declined to comment.

The firm recently held a close on Centerbridge Partners II on about $3.8 billion, according to a filing with the US Securities and Exchange Commission.

The fund has been getting heavy interest from public institutions in the US, including the state pension systems of Massachusetts, Wisconsin and Oregon, the Texas County & District Retirement System and the Nashville and Davidson County Metropolitan Employee Benefit System. Park Hill Group is working as placement agent for the fundraising.

Centerbridge II began marketing in July and held a first close in November on more than $1 billion. By the end of 2010, the fund had collected more than $2.5 billion. Centerbridge, formed in 2006, raised $3 billion for its debut fund in 2006.

Fund I was generating a 1.26x total value multiple and a 17.5 percent internal rate of return as of 30 September, according to numbers from the Oregon Public Employees Retirement Fund.

The firm has been getting traction for its second fund because of performance, and also the flexibility of its investment strategy, sources have told Private Equity International in past interviews. The firm’s strategy allows it to target distressed opportunities and more traditional private equity buyout investments.

Centerbridge was formed in 2006 by Mark Gallogly, a former Blackstone executive, and Jeffrey Aronson, a former distressed securities experts from hedge fund Angelo Gordon.