Chart of the week: Distressed and turnaround private equity funds target North America

Almost two-thirds of capital with a distressed or turnaround strategy is being focused on North America


Click here for a larger version

Closed-ended private equity funds in or coming to market on 1 October 2015 were targeting more capital that at the same point a year ago. With only distressed or turnaround vehicles seeing less capital targeted at them, PEI’s Research & Analytics team decided to take a closer look at the funds in market focused on these strategies.

There were 2,413 closed-ended private equity vehicles in or coming to market at the end of Q3 2015. Of these, 37 were distressed and turnaround funds, the same as a year ago.

In total, $22.14 billion is being targeted collectively by distressed and turnaround vehicles. North America is the focus of 64 percent of this capital, with 22 funds in market targeting $14.1 billion to invest in the region.

The largest distressed or turnaround vehicle on the road at 1 October was the North America-focused 3G Special Situations Fund IV, which opened in November 2014 with a target of $5 billion.

Vehicles with a global or European remit represent 20 percent ($4.35 billion) and 15 percent ($3.34 billion) of total capital targeted respectively. Oaktree Principal Fund VI, with a global focus, is the second largest distressed or turnaround fund in market targeting $3 billion.

Just two percent of distressed or turnaround funds in market at 1 October were Asia-Pacific-focused. With the exception of Latin America, the Middle East and Africa – which were not targeted for distressed or turnaround investment – this represented the smallest proportion by region.

There were five vehicles on the road planning to invest in Asia-Pacific, with a target size of $339.05 million. The largest of these is Helmsman Capital Fund III, which launched in March 2012 targeting $141.45 million.