Key Takeaways
- • Redwood Capital Management, a $9.4 billion hedge fund focused on opportunistic credit and special situations, is seeking to raise $2.25 billion for its next drawdown fund, according to a letter to investors seen by Bloomberg.
- • The firm's most recent drawdown vehicle reported a net internal rate of return of 31.6% year-to-date and 17.4% since its 2021 inception.
- • Redwood has deployed 50% of that prior fund's capital, targeting dislocations tied to Russia's invasion of Ukraine in 2022, higher interest rates, and inflation.
Summary
Redwood Capital Management, a hedge fund with $9.4 billion in assets focused on opportunistic investments in credit and special situations, is looking to raise another $2.25 billion for its next drawdown fund, according to a letter to investors seen by Bloomberg. The planned vehicle reflects the firm's strategy of pursuing complex, distressed-adjacent opportunities in what the headline describes as an "adversarial" debt market.
According to documents shared with investors, the firm's last drawdown vehicle reported a net internal rate of return of 31.6% so far this year and 17.4% since its 2021 inception. Those returns were tied mostly to opportunities that arose from Russia's invasion of Ukraine in 2022, higher interest rates, and inflation. Redwood has invested 50% of that fund's capital to date.
The fundraising effort underscores continued investor appetite for drawdown structures that allow managers to deploy capital into dislocated credit as opportunities emerge. The primary source does not disclose further terms, such as fee structure, target close date, or investor composition.
According to documents shared with investors, the firm's last drawdown vehicle reported a net internal rate of return of 31.6% so far this year and 17.4% since its 2021 inception. Those returns were tied mostly to opportunities that arose from Russia's invasion of Ukraine in 2022, higher interest rates, and inflation. Redwood has invested 50% of that fund's capital to date.
The fundraising effort underscores continued investor appetite for drawdown structures that allow managers to deploy capital into dislocated credit as opportunities emerge. The primary source does not disclose further terms, such as fee structure, target close date, or investor composition.
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