Fidelity successfully secures $729 million in funding for its second credit opportunities fund at its final closing.
In a significant move, Fidelity Investments has successfully closed its Credit Opportunities Fund II with a total of $729 million[5], exceeding its initial fundraising target of $500 million[2]. This long-only credit portfolio, which invests in a diverse opportunity set of stressed, distressed, and restructured debt or equity instruments[1], focuses on the U.S. publicly traded, secondary corporate credit market[3].
The success of Fidelity Credit Opportunities Fund II may be attracting investors away from other distressed opportunities funds, such as the one being closed by Davidson Kempner[8]. The team managing Fidelity's fund averages more than 25 years of investment experience in public and private markets[9]. Nate Van Duzer, Bill Wall, and Harley Lank, all managing directors of special situations at Fidelity, co-manage the fund[4][6][7].
Fidelity's resources include an integrated special situations team, analysts, and traders, which help optimize the investment process and enhance the client experience[10]. The firm's demand for alternative investment vehicles continues to grow as investors recognize the team's deep industry knowledge, deliberate approach, and commitment to delivering exceptional value[11].
Fidelity runs a range of alternative investment vehicles in private equity, private credit, real assets, liquid alternatives, and digital assets[12]. Harley Lank, the portfolio manager and head of Fidelity's high income and alternatives division, co-manages Fidelity Credit Opportunities Fund II[7]. The oversubscription for Fidelity Credit Opportunities Fund II was more than double that of its 2020 predecessor, Fidelity Distressed Opportunities Fund I[6].
It is important to note that Fidelity has not disclosed the size or target of the distressed opportunities fund being closed by Davidson Kempner[3], and details about the size or target of the distressed opportunities fund Fidelity is closing have not been provided[4]. The competition between these funds may be a point of interest for investors in the distressed credit market.
The success of Fidelity Credit Opportunities Fund II is contributing to the growth of Fidelity's demand for alternative investment vehicles[11]. As the market continues to evolve, it will be interesting to see how these funds perform and how they shape the distressed credit landscape.
Investors may be considering shifting their focus from other distressed opportunities funds, such as the one being closed by Davidson Kempner, towards Fidelity Credit Opportunities Fund II, given its impressive oversubscription. This growth in demand for Fidelity's alternative investment vehicles, such as private equity, private credit, real assets, liquid alternatives, and digital assets, underscores the recognition of the team's deep industry knowledge, deliberate approach, and commitment to delivering exceptional value.
