Cerberus Capital Management, a US distressed debt and hedge fund firm, is raising a $6bn (€4.7bn) fund to take advantage of the expected rise in corporate failures.

The fund, which is being marketed to investors, will be $5bn bigger than its predecessor. Cerberus specialises in distressed investments by investing in the debt of undervalued or financially troubled companies. It takes equity stakes through acquisitions, particularly companies with operational and financial difficulties.