At least two more hedge fund firms have started new credit funds.
Sculptor Capital Management has raised about $120 million for the Sculptor Tactical Credit Fund, according to a regulatory filing. This is the sixth private credit fund that the firm has raised since 2010.
Canyon Partners, meanwhile, has raised about $200 million so far for at least two versions of Canyon U.S. Real Estate Debt Fund III, according to regulatory filings.
Institutional Investor earlier reported that according to two separate regulatory filings, King Street Capital is also raising money for two new funds: the King Street Global Drawdown Fund II and the King Street Opportunistic Credit Fund.
Chris Acito of Gapstow Capital Partners, which specializes in credit strategies, said in a phone interview that it’s not “a compelling time” to launch a high-yield fund in the U.S., but he did note that “people are beginning to think about Europe a little bit.”
Sculptor Tactical Credit Fund launched on April 1 and is ultimately targeting as much as $750 million, according to a person familiar with the offering. The drawdown fund is targeting a net 12 percent to 14 percent annualized internal rate of return (IRR), according to the source. It plans to invest in corporate credit, structured credit, and real estate credit, with a six-year investment term.
Sculptor declined to comment.
Credit strategies accounted for a majority of Sculptor’s $38.4 billion in assets as of April 1, and at year-end it had $22.4 billion in its dedicated credit products.
The Sculptor Credit Opportunities Master Fund, the firm’s global opportunistic credit fund, posted a 17 percent gain last year. It has also generated a 10.1 percent annualized return since its November 2011 inception, beating its benchmark BAML Global High Yield index by nearly four percentage points per year, according to the publicly traded firm’s annual report.
Separately, the Sculptor Opportunistic Credit Partnership has generated a net IRR of 12.3 percent since its April 2010 inception, or more than double the high-yield benchmark, according to a person familiar with the fund. It manages $3 billion.
In general, Sculptor’s Opportunistic Credit strategy seeks to capture value in mispriced investments across disrupted, dislocated, and distressed situations, according to the firm’s website.
Sculptor’s Customized Credit Focused Platform posted a 17.2 percent net return in 2021, according to the annual report. It has also generated a 12.7 percent annualized gain since its April 2011 inception, nearly double the BAML Global High Yield index. Sculptor says in its filing that the portfolio “invests in a flexible credit mandate across the credit spectrum to allow timely investments as market conditions change and dislocate.”
The firm says that last year’s returns represented their largest annual excess return over high yield. Meanwhile, the $750 million Sculptor Real Estate Credit Fund I has generated a 13.5 percent IRR since its February 2015 inception, according to the filing.
Canyon Partners is best known for its credit-driven multistrategy hedge funds.
Canyon Partners Real Estate is the real estate direct investing arm of Canyon Partners, LLC. Over the past 10 years, it has invested about $5.6 billion of debt and equity capital across more than 200 transactions, according to the firm.
In May 2021 Canyon raised more than $650 million for Canyon Laurel Fund II, a U.S. real estate debt vehicle, according to a press release at the time. Its predecessor fund had raised $530 million, according to the announcement.
