Atlantic Park Nabs $2.2 Billion for Debut Strategic-Capital Fund

(Bloomberg) -- Atlantic Park, a joint venture between Tripp Smith's Iron Park Capital Partners and private equity firm General Atlantic, has raised $2.2 billion for its debut fund.

The venture closed its first vehicle, Atlantic Park Strategic Capital Fund I, according to people with knowledge of the matter and a memo to investors seen by Bloomberg News. It received backing from more than 50 investors, including sovereign wealth funds, pension funds, insurance companies and family offices, among others, the people said.

Atlantic Park is targeting annualized returns of 15% to 20% after fees, Bloomberg News has reported. When the venture launched last year, it initially sought to raise $5 billion, but closed its latest fund at less than half that total after investors said they wanted to avoid a dilution to returns that could occur in a prolonged fundraising period, people with knowledge of the matter said.

Read more: GSO alum returns with firm buying partnership stakes

“Although prospective investors have requested that the fund remain open into the second half of 2021, we have decided to respect the expressed preferences of our early investors to close the fund now so they can retain the strong early deployment and underlying portfolio performance,” Atlantic Park executives wrote in the memo.

In a first-quarter update to limited partners, Atlantic Park described a roughly $2 billion investment pipeline as “robust” thanks in part to its reputation for providing tailored financing for companies seeking “either offensive or defensive capital solutions.” Executives wrote that the venture will probably close three to four new investments in the second half of 2021.

Second Fund

New York-based Atlantic Park is expected to begin raising a second fund later this year, the people said.

A representative for the venture declined to comment.

The effort, which focuses on out-of-favor or rescue financings and providing capital to support complex mergers and acquisitions, has already committed about $1.5 billion of its first fund. The venture teamed up with Carlyle Group Inc. to refinance SBP Holding Inc., an industrial-distribution platform owned by AEA Investors, and made loans to NYSE-listed Team Inc. and Horizon Global Corp., both which came with attached warrants.

The venture seeks to invest $200 million to $300 million in individual situations in the U.S., U.K. and Europe, where it injected capital into Wilmslow, England-based Morris Homes and provided a term loan to support Clayton, Dubilier & Rice's acquisition of Wolseley UK. With co-investors, the effort has the ability to provide larger sums of capital. Atlantic Park held talks to helm an $800 million bankruptcy loan to Garrett Motion Inc., but the auto-parts maker ultimately selected a proposal from a consortium led by Centerbridge Partners and Oaktree Capital Management.

Institutional investors have been piling into funds dedicated to strategic-capital bets, lured by the potential for attractive returns. Kennedy Lewis Investment Management, which makes opportunistic credit bets, in January raised $2.1 billion for its second fund. In May, HarbourVest Partners closed its second credit opportunities fund at $833 million.

GSO Capital Partners co-founders Bennett Goodman, Smith and Doug Ostrover have left Blackstone Group Inc., which acquired the credit manager in 2008. Smith, who founded Iron Park in 2019, helps oversee Atlantic Park alongside executives including Matthew Bonanno, Michael Whitman and Bill Ford, its website shows.