Oaktree Capital Group LLC (OAK:US), the world’s largest distressed-debt investor, plans to raise $3 billion for its next global fund that will seek to take control of companies through purchases of loans and equity stakes, according to two people with knowledge of the situation.
Oaktree Principal Fund VI LP would be larger than the $2.8 billion gathered by the predecessor fund in 2010, said the people, who asked not to be identified because the fundraising is private. The fund, though global, will focus mainly on investments in the U.S., one of the people said. Alyssa Linn, a spokeswoman at Sard Verbinnen & Co., declined to comment on behalf of Los Angeles-based Oaktree.
Oaktree’s new fund is the latest in its series of so-called Principal funds, which buy equity or debt in distressed or stressed businesses with an eye toward eventually taking control of the companies. The firm, which managed $77.1 billion as of Dec. 31, last year raised $4.8 billion for its latest fund that seeks to purchase debt from ailing companies without seeking to take control.
The prior fund in the series, Oaktree Principal Fund V LP, was about 71 percent invested as of Sept. 30, according to a U.S. Securities and Exchange Commission filing by Oaktree. It was producing a 1.2 times multiple and a 6.1 percent net internal rate of return as of that date.
Howard Marks founded Oaktree in 1995 with Bruce Karsh and five other partners from TCW Group Inc. The firm also manages a strategy dedicated to making investments in the emerging markets, and has funds devoted to real estate, corporate debt and mezzanine investing, according to its website.
The firm in 2011 raised 3 billion-euros ($4 billion) for its third European-focused fund (PEF8972:US) focused on taking control of distressed European companies through debt or equity.
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