GSC Partners, a domestic and European investment firm with about $6 billion in capital under management, has wrapped up the fundraising for the GSC Recovery II Funds, which will invest $757 million in distressed debt. The fund is only partially invested. "There is still a sufficient amount of unallocated capital," said a source familiar with the new fund. GSC Recovery II will employ the same strategies as GSC Partners' original recovery effort that was completed in 1998. It is an opportunistic, broad-based fund that seeks fundamental value across a wide range of industries, noted the source.
The fund invests in various instruments across the capital structure, but there are no specific allocations to loans, bonds or mezzanine debt. While the majority of GSC Partners' positions have been control positions, the firm's recovery efforts do include situations with minority positions. Commenting on the timing of the new fund and the possibility of declining opportunities for distressed investors, the source said, "There is still a lot of product out there that needs to be worked through." GSC Partners hired additional personnel over the last six months to support the new effort, but the identities of the recent hires could not be determined. Robert Hamwee, managing director and distressed debt portfolio manager for GSC Partners, did not return calls seeking comment.