Park Square Capital LLP, the credit investment firm headed by former Goldman Sachs Group Inc. restructuring banker Robin Doumar, is seeking 1 billion euros ($1.4 billion) for its latest fund to take advantage of a void in corporate lending by Europe’s banks.
Park Square Capital Partners III LP will invest in the subordinated debt of large and middle-market companies and purchase performing and distressed credits on the secondary market, according to marketing documents. UBS AG is helping raise money for the fund.
London-based Park Square, which manages more than $3.2 billion, joins Oaktree Capital Group LLC and Carlyle Group LP in raising debt funds as European lenders are forced by regulators to shrink their balance sheets and the market for collateralized loan obligations remains subdued after the financial crisis. Banks have sold 3.5 trillion euros of assets since 2012 and will divest an additional 1.8 trillion euros, according to Royal Bank of Scotland Group Plc data that includes bundled debt.
Nick Woods, a spokesman for Park Square at Instinctif Partners in London, declined to comment on the fund.
Doumar, who previously ran workouts and restructurings at Goldman Sachs, co-founded Park Square in 2004. Its first and second subordinated debt funds have generated realized internal rates of return of 12.4 percent and 23.9 percent, respectively, according to the marketing document. If the target is met, the new fund will be larger than the 850 million euro subordinated credit pool Park Square gathered in 2011, and around the same size as its debut fund from 2005.
The firm is also seeking 500 million euros for its second fund focused on European senior secured debt. Park Square Capital Credit Opportunities II LP held an initial close at $182 million in November, according to the document.