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Law360 (November 10, 2020, 4:20 PM EST ) Varde Partners, with help from legal adviser Paul Weiss, has amassed more than $2.6 billion to invest in opportunities created by the market dislocation caused by the coronavirus pandemic, the Minnesota-based private equity firm said Tuesday.
The money was raised in two tranches, with Varde Partners saying on Tuesday that it has secured more than $1.6 billion for The Varde Dislocation Fund, which surpassed its original $1 billion target in just five months of fundraising, according to a statement.
Earlier in 2020, the firm launched a separate market dislocation-focused fund with $1 billion in capital, meaning that in total, Varde has raised more than $2.6 billion this year to target opportunities that have materialized amid the COVID-19 crisis. The name of that separate fund, which Varde said was raised "through a private banking platform," was not disclosed.
"We believe the profound impact of COVID-19 has marked the start of a major, connected cycle," said George Hicks, co-founder and co-CEO of Varde. "Having established a deep expertise in credit over the past 27 years, we bring to bear our experience investing through many credit cycles to guide us as the crisis unfolds."
For the Varde Dislocation Fund, about 55% of capital commitments came from new investors, despite the fact that the fund was raised with no in-person meetings. The Varde funds have flexible mandates to invest across the world in a variety of areas, including in companies that might be undervalued, or in stressed or distressed credit.
Ilfryn Carstairs, co-CEO and chief investment officer for Varde, said in the press release that "our platform is well suited to the opportunity in front of us, with the ability to pivot to markets and geographies where we see the best relative value."
Varde's two capital raises come after the firm finalized its 13th flagship investment vehicle in December, before the U.S. coronavirus outbreak. That fund, called Varde Fund XIII, was also guided by Paul Weiss and closed with $2.47 billion in capital commitments. It targets investments in credit, distressed assets, real estate and financial services.
Although that fund was raised before the pandemic took root, Varde was already seeing the potential for some kind of market disruption, saying at the time that Varde Fund XIII will keep an eye on "systemic distress factors," including opportunities that could arise in the event of a potential economic downturn.
Varde boasts having invested about $75 billion since its formation in 1993. The company says it currently manages more than $14 billion on behalf of its investors.
The Paul Weiss Rifkind Wharton & Garrison LLP team advising Varde includes partner Marco V. Masotti and associates Victoria S. Forrester and Brendon R. Smith.
--Editing by Amy Rowe.
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