Ex-Carlyle Distressed Heads Said to Seek $1 Billion for Own Fund

Jul 23, 2014 1:04 pm ET

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July 23 (Bloomberg) -- Stellex Capital Management LP, the private-equity firm run by former heads of the distressed investing team at Carlyle Group LP, is seeking as much as $1 billion for a debut fund to buy troubled assets in the U.S. and Europe, said two people with knowledge of the fundraising.

The firm, with offices in New York and London, has set a target of $750 million and can raise an additional $250 million before the fund reaches its limit, said the people, who asked not to be named because the information is private. The fund will focus on control investments, the people said.

Ray Whiteman and Michael Stewart, who left their roles as co-heads of Carlyle Strategic Partners last year to help start Stellex, are seeking to take advantage of a buoyant market for capital raising. Private-equity firms attracted $127 billion from April through June, making it the fourth consecutive quarter where fundraising exceeded $100 billion, according to data compiled by London-based researcher Preqin Ltd.

Among fledgling groups seeking capital this year is Staple Street Capital, started by two former executives in the U.S. buyout group at Carlyle Group, who are seeking $200 million for a debut fund, according to two people with knowledge of the matter. Huntsman-Lion Capital Partners LP, co-founded by the father of former Republican candidate Jon Huntsman Jr., is targeting $800 million for a first-time fund that will invest in middle-market chemical and materials businesses, said two people with knowledge of the matter in June.

Carlyle Alumni

Stellex Capital hired investment bank Sixpoint Partners LLC to help raise money for the pool, said the people. Whiteman didn’t return a phone call and e-mailed request for comment.

Stellex Capital plans to invest as much as $100 million in companies with as much as $2 billion in revenue, according to the firm’s website. The firm is targeting service and industrial companies, which includes aerospace, automotive, business services, infrastructure and energy and power.

Carlyle’s third distressed fund closed at $700 million last year, half the amount raised by the prior offering in 2007. Stewart joined Whiteman as co-head of the distressed group after Brett Wayard left in 2012.

Stellex Capital’s team also includes Mark Alter, who was a founding member of the leverage-finance group at Carlyle. He joined Carlyle’s distressed team in 2007 where he focused on bank loans, funded and unfunded revolvers, distressed bonds and reorganized companies.