Fundraising

Morgan Stanley closes $500m distressed debt fund of funds

Morgan Stanley Alternative Investment Partners has closed its first distressed debt fund of funds, as the bank continues to expand its private equity activities after pulling out of the market in 2004.

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The alternative asset arm of Morgan Stanley has closed its first distressed debt fund of funds on $500 million (€366 million). 

The Morgan Stanley Global Distressed Opportunities Fund will offer investors access to distressed debt funds.

 A spokesman for the bank said it was its first fund exclusively focused on distressed debt.

The fund’s focus is turnarounds, debt-for-control, and active trading in the US, Western Europe and emerging private-equity markets in Asia and elsewhere. The fund will probably invest up to 20 percent in direct co-investments, the bank said in an internal memo obtained by PEO.

Tom Dorr, chief investment officer, will be heading up the fund. Cory Pulfrey is in charge of the alternative asset arm.

 Morgan Stanley’s fund of funds team has $6 billion under management, including its latest vehicle.

Earlier this week, Morgan Stanley appointed Graham Keniston-Cooper to head up its European private equity arm. Keniston-Cooper came to Morgan Stanley a year after he was head of Lazard’s private equity team. During his time at Cinven he led the buyout of UK cinema chain Odeon.

The private equity arm which was started in March is raising a $6 billion fund according to a placement agent. This is a dramatic turnaround for Morgan Stanley which span off Metalmark, its private equity arm a few years ago.