(Bloomberg) -- A Centerbridge Partners credit vehicle posted strong returns for a second successive year after taking advantage of market pricing variations, according to people familiar with the matter.

The New York-based investment firm’s Special Credit III Flex Fund returned 51% for 2021 on a gross basis, said the people, who asked not to be identified because the information is private.

The fund’s performance was bolstered by investments including auto parts company Garrett Motion Inc. and insurance firm HCI Group Inc. The $3 billion pool is now 95% invested, the people said.

Centerbridge’s flagship vehicle, the $1.3 billion Special Credit III Fund, returned 37% gross for year, the people said. 

A representative for Centerbridge declined to comment.

In a second straight year of record stimulus, distressed debt funds had to adjust to a changing market and the best returns came from a select few opportunities. The pool of U.S. traded distressed bonds and loans totaled just $66 billion in December, down from almost $1 trillion during its 2020 peak. An index of troubled U.S. bonds was up 25% for 2021.

Centerbridge’s debt fund specializes in lending to companies in financial distress, including some that are going through Chapter 11 bankruptcy. The firm previously invested in Mattress Firm Group Inc., which filed for an initial public offering this month after it closed stores and invested in its online offerings, according to filings.

The investment firm, which was founded in 2005, operates private equity, credit and real estate strategies. The company has owned stakes in technology services firm Ahead and travel nursing company Medical Solutions, according to data compiled by Bloomberg.

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