Cerberus receives big commitment on first senior debt fund

In addition to committing $200m to Cerberus’s mid-market senior debt fund, the Pennsylvania Public School Employees’ Retirement System committed almost $300m across three private equity funds.

The Commonwealth of Pennsylvania Public School Employees’ Retirement System committed $200 million to Cerberus Levered Loan Opportunities Fund I, which is targeting investments in secured debt obligations.

The limited partnership fund will originate and issue senior secured debt to US mid-market companies, according to retirement system documents.

Cerberus Capital Management and its affiliated lending group, Cerberus Business Finance, did not set a fundraising target in US Security and Exchange Commission documents filed in April.

However, in presentation documents delivered to PSERS, Cerberus indicated that it expects around $750 million in limited partner commitments with a $27 million commitment from the general partner.

The firm has not hired a placement agent to market the fund, according to SEC filings.

The $51 billion retirement system invested in three of Cerberus’s private equity funds, which have generated net internal rates of return of 27.5 percent, 14.3 percent and 8.1 percent. The private equity fund performances contributed to PSERS decision to commit to the firm’s first loan opportunities fund, according to state documents.

Cerberus Levered Loan Opportunities Fund I is not the only fund the firm has on the market. Cerberus also launched its fifth private equity fund in April, targeting $3.75 billion.

In addition to Cerberus, PSERS committed €100 million to The Fifth Cinven Fund, which is targeting €5 billion for European buyouts investments between €150 million and €600 million. Recent PNC Capital spin-out Incline Partners received a $50 million commitment for its first independent fund, which is targeting $300 million for lower mid-market companies in North America. The retirement system also committed up to $100 million for Summit Partners Growth Equity Fund VIII, targeting $3 billion for late-stage growth companies.