Certares and Knighthead Close Inaugural $1.5 Billion Fund Focused on Distressed Travel, Tourism and Hospitality Assets
Certares Management LLC (“Certares”), a leading investment specialist dedicated to the travel, tourism and hospitality sectors, and Knighthead Capital Management, LLC (“Knighthead”), a leading credit investment management firm, announced the closing of CK Opportunities Fund (the “Fund”) at approximately $1.5 billion in total commitments.
The Fund exceeded its initial target of $1 billion over a six-month fundraising period in a fully virtual environment. The Fund received strong support from a diversified global investor base, including leading sovereign wealth funds, family offices, pensions, endowments and foundations, and financial institutions.
The Fund is the first co-managed fund for Certares and Knighthead, and it represents a powerful partnership between the two firms to capitalize on opportunities that have emerged due to the COVID-19 pandemic. With the Fund, Certares and Knighthead aim to be a preferred capital solutions provider for travel, tourism and hospitality companies facing acute liquidity and financing needs.
Since its inception in October 2020, the Fund has allocated approximately $650 million of capital across four investments: Azul Brazilian Airlines, LATAM Airlines Group, Mystic Invest Holdings and Hertz Global Holdings, Inc.1 The Fund’s Investment Committee consists of Greg O’Hara, Colin Farmer and Jeff Nedelman from Certares and Tom Wagner, Ara Cohen and Andrew Shannahan from Knighthead.
Greg O’Hara, Founder & Senior Managing Director of Certares, said, “We would like to thank our investors for their support and partnership. We are thrilled to partner with Knighthead, and believe the combination of their world-class distressed credit capabilities with our travel sector expertise creates a truly differentiated fund offering to address the once-in-a-lifetime opportunity set that has emerged in the travel sector due to COVID-19. While the path back to ‘normal’ will be uneven and challenging, we here at Certares have seen firsthand that the travel industry is incredibly resilient and no stranger to disruption and change. We are confident the industry will not only return, evidenced by robust pent-up demand, but reinvent itself to be stronger than before.”
Tom Wagner, Co-Founder & Managing Member of Knighthead, said, “In our experience, there is always a sector at the center of every distressed cycle. In this case, it is clearly travel and leisure, and we are privileged to partner with the preeminent sponsor in the sector. While the broader public markets have recovered, there is a long tail of opportunities in the private market that seek capital after a year of severely reduced travel volumes. Using Knighthead’s restructuring expertise, we endeavor to structure investments with downside protection and upside convexity that will benefit from Certares’ deep industry expertise, relationships and operational know-how.”
Sidley Austin LLP served as legal counsel to Certares and Knighthead.
About Certares Management LLC
Founded in 2012, Certares is a private investment platform dedicated to investing in the travel, tourism, and hospitality sectors with approximately $4.5 billion of assets under management. Certares brings together a team of experienced investment and operating professionals with deep industry, investment, transaction, and management experience. Certares has offices in New York, Luxembourg, and Dubai. For further information, please visit www.certares.com.
About Knighthead Capital Management LLC
Founded in 2008, Knighthead Capital Management, LLC is a diversified credit platform which specializes in credit analysis, sourcing, trading, and restructuring. Knighthead has worked to create a stable base of capital to support the business and manages approximately $6.1 billion of assets across a variety of investment vehicles including a long/short evergreen hedge Fund, several closed-end credit vehicles, a dedicated Real Estate Lending business and an insurance asset management business. Knighthead has offices in New York, Greenwich CT, and West Palm Beach, FL. For further information, please visit www.knighthead.com.
1 The investment in Hertz Global Holdings, Inc. is expected to close in June 2021, subject to bankruptcy court confirmation, regulatory approvals and other customary closing conditions.