Leonard Green Raises $500M Debt Fund

Mar 20 2008 | 1:01am ET

Leonard Green & Partners, a Los Angeles-based private equity firm is raising a fund to pursue investments in debt securities, including bank debt and bonds of non-investment grade companies within the retail, healthcare, media, telecom and distribution sectors.

The California Public Employees Retirement System is committing $100 million to the new fund—Green Credit Investors—which held a first close in January with $414 million and is aiming to raise $500 million by mid-year.

“A number of market conditions are putting downward pressure on pricing in the primary markets, while pricing volatility in the secondary market continues to increase,” said a memo from CalPERS. “A large backlog still remains on the leveraged loan and high yield debt forward calendar, exacerbated by the tightening lending standards and turmoil in the subprime markets.”

CalPERS has invested with Leonard Green since 1994 and has committed $800 million to five of the firm’s buyout funds.

A call made to the firm seeking comments about its new offering was not returned by press time.

Leonard Green & Partners was founded in 1989 and is headed by managing partners Jonathan Sokoloff, John Danhakl and peter Nolan. The firm has raised six private equity funds with total commitments of some $9 billion.

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