* To make distressed-for-control investments
* Targeting U.S. lower middle market
* Deals harder to come by as economy mends
By Chris Witkowsky
NEW YORK, Sept 4 (Reuters-peHUB) - Solace Capital Partners, an investment firm launched by former executives of distressed debt specialist Oaktree Capital Management, is preparing to hit the market targeting $500 million for its debut vehicle, according to three people with knowledge of the fundraising.
Launched last year, Solace Capital is led by Managing Partners Christopher Brothers, Vincent Cebula and Brett Wyard, all of whom worked together at Oaktree Capital. Brothers did not respond to a request for comment. Brothers and Cebula launched Solace Capital last year while Wyard joined in April.
Solace Capital executives have been out talking to potential investors for the past few months, according to two of the people, both potential investors who have heard the pitch.
The firm focuses on control-oriented special situations, including distressed-for-control investments, in the lower middle market, according to one of the people with knowledge of the firm. Solace Capital typically looks to make investments of $10 million to $75 million in U.S. companies.
Brothers was a managing director at Oaktree Capital from 1996 to 2006, when he joined Saybrook Capital as managing partner and co-portfolio manager. He left Saybrook Capital in June 2013.
Cebula worked as an aviation consultant at Centerbridge Partners from 2012 to February 2013, and before that as a managing director at Jefferies & Co. He worked at Oaktree Capital from 1994 to 2007, according to his LinkedIn profile. At the beginning of his career, Cebula worked as an associate in corporate finance at Drexel Burnham Lambert, his profile said.
Wyard, meanwhile, worked as managing director and co-head of Carlyle Strategic Partners from 2005 until 2012. Prior to that, Wyard was a managing director at Oaktree Capital, which he joined in 1999. While there he helped the firm expand into Europe, according to his biography online.
Fundraising for distressed strategies has gotten tougher as deals grow scarce in a strengthening economy. In early August, Apollo Global Management co-founder Josh Harris essentially said he was keeping his fingers crossed for some good, old-fashioned market dislocation.
“We’d welcome a rising interest rate environment. If rates rise quicker than expected, any resulting dislocation would benefit us,” Harris said on Apollo Global’s second quarter earnings call.
One of the best-known distressed debt investors, Oaktree Capital, is reportedly hedging its bets for a downturn. The firm is out seeking $10 billion for its next flagship vehicle, with plans to invest $3 billion of the pool right away and reserve $7 billion until more opportunities arise, Bloomberg News reported this week.
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