New York-based KPS Capital Partners has closed a $1.2 billion (€889 million) private equity fund focused on controlling investments in turnarounds, restructurings, bankruptcies and other special situations.
The firm received more than $4 billion in commitment requests for KPS Special Situations Fund III, which had a $1 billion target.
Mac Hofeditz of Probitas Partners was the fund’s placement agent. He said in a statement that “limiting the fund’s size in the face of such extraordinary demand is rare, if not unprecedented, in my experience, and is indicative of KPS’ disciplined approach to investing capital and managing its franchise”.
Limited partners include public and private pension funds, fund of funds, major financial institutions, endowments, foundations and family offices from North America, Europe and Asia.
The KPS Fund III investment team will be led by KPS co-founders and managing partners Michael Psaros and David Shapiro, partners Raquel Palmer and Jay Bernstein, and “an expanding group of experienced investment turnaround professionals”, it said in a statement.
Paul, Weiss, Rifkind, Wharton & Garrison served as legal counsel in the fund’s formation.
KPS is still investing its second fund, which closed in 2004 on $404 million. The firm manages more than $1.8 billion in capital.
It is the first fund KPS has closed following a staff restructuring prompted by the 2005 departure of four former investment professionals, including principal Stephen Presser. Presser – along with Daniel Collin, Justin Hillenbrand and Philip Von Burg – left KPS to form Monomoy Capital Partners, a firm focused on distressed and underperforming middle market companies. Monomoy is about to close a fund of its own.