Banner Ridge raises more than $600m for second primary distressed fund

More than double the size of its predecessor, Banner Ridge DSCO Fund II will invest in private equity funds, co-investments and early secondaries.

Banner Ridge Partners, founded in 2019 by Siguler Guff‘s former secondaries head, has closed its second fund targeting distressed, special situations and credit opportunities on a primary basis.

Banner Ridge DSCO Fund II reached its hard-cap, raising $639 million of total commitments, according to a statement. The fund will make primary fund commitments, co-investments and early secondaries investments.

Banner Ridge launched the fundraise in April, according to Secondaries Investor data. Investors include public and private pension funds, RIAs and family offices.

Co-founder and managing partner Tony Cusano said in the statement that DSCO II is well positioned to take advantage of current market conditions characterised by rising interest rates, inflation and volatility. “We have already made several investments in the fund and continue to progress on a robust pipeline of opportunities that align squarely with our proven investment strategy.”

Banner Ridge DSCO Fund I closed on its $300 million hard cap in 2021 and surpassed its target of $100 million to 150 million, Secondaries Investor reported. It was designed as a vehicle for two institutional clients but the global pandemic spurred on interest in distressed and special situations, causing an expansion in the strategy, Cusano told affiliate title Buyouts.

Banner Ridge closed on its $1 billion hard-cap for flagship secondaries fund Banner Ridge Secondary Fund IV last year. The fund’s target was $600 million and it had been in market since March, according to SI data.

Secondaries fundraising dipped 30 percent year-over-year in the first half with $31.2 billion raised, according to preliminary data from Secondaries Investor.

The fall comes off the back of a rapid period of secondaries fundraising over the past two and a half years, topped by a record $98.8 billion in 2020, $54.4 billion of which was raised in the first half, the data shows.