GI Partners Raises $1.9 Billion Fund to Buy Distressed Assets

Oct. 12 (Bloomberg) -- GI Partners LLC, the private equity firm that owns U.K. caravan-parks operator Park Resorts, said it raised a $1.9 billion fund to buy distressed companies in the U.S. and western Europe after the worst recession in 70 years.

The fund, GI Partners’ third, is about a third larger than the $1.5 billion pool the Menlo Park, California-based private equity firm raised in 2006. Backers of the new pool include Florida Retirement System Trust Fund, GI said in a statement.

“GI Partners’ successful investment strategy of focusing on distressed situations is expected to provide attractive investment opportunities,” the company said in the statement.

Investment firms such as New York-based Apollo Management LP and Los Angeles-based Oaktree Capital Management LLC are buying debt or equity of distressed companies at a discount with the aim of taking control and turning them around. Moody’s expects the global speculative default rate to peak at 12.5 percent this quarter as the U.S. and European economies struggle to recover from the worst recession in 70 years.

The rate rose to 12 percent at the end of the third quarter, up from 2.8 percent a year earlier, the ratings company said in an Oct. 6 report.

GI’s founder, Rick Magnuson, is a former deputy partner in Nomura International Plc’s private equity group in London, where he worked with financier Guy Hands, now Chairman of Terra Firma Capital Partners Ltd., according to the firm’s Web site.