HIG affiliate closes $1.1bn fund

Bayside Capital's latest debt vehicle has exceeded its target, just two years after closing a $3bn distressed debt fund.

US-headquartered Bayside Capital, an affiliate of private equity firm HIG Capital, has closed “HIG Bayside Loan Opportunity Fund II”, with $1.1 billion in committed capital.

The fund, which originally had a target size of $1 billion, “will have a broad investment mandate to invest in non-control loan obligations of stressed and distressed companies in the U.S. and Europe”, according to a statement.

Loan Opportunity Fund II has a slightly different strategy than the firm’s most recent distressed investment vehicle, “HIG Bayside Debt & LBO Fund II”, which raised $3 billion for control investments in 2008.

Last month the €24 billion Ireland’s National Pensions Reserve Fund and the $11 billion New Mexico Public Employees’ Retirement Association became limited partners in the fund, with the PERA committing $20 million in capital, as reported on PEO.

The NPRF, which did not disclose financial details of their investment in Bayside, recently raised its allocation to private equity assets to 10 percent from 8 percent. 

Bayside, which has $4.5 billion in committed capital, focuses on struggling mid-market companies, making capital injections via senior and subordinated debt, equity, special situation loans and other security options. 

HIG Capital, which targets acquisitions and recapitalisations in small and mid-market businesses, has $8.5 billion of equity capital under management.

Bayside was not immediately available for comment.