Hedge Funds

Courage Capital readies distressed debt fund


The new fund will emphasize non-control positions in secured and senior debt instruments.

Courage Capital Management of Nashville is looking to recapture some of the assets the onetime billion-dollar firm managed before 2007. It recently closed a credit vehicle it launched earlier this year to new investors and has begun raising capital for a distressed fund to be introduced in the first quarter of next year.

Credit Opportunities Fund I, which invests in bank debt, launched in February and raised $85 million, including a $50 million commitment from Alfred I. du Pont Trust. Credit Opportunities Fund II will focus on distressed securities of middle-market U.S. companies.

Both funds are closed-end vehicles that mimic