Bloomberg News

Oaktree Said to Seek Capital for European Lending Fund

February 20, 2013

Oaktree Capital Group LLC Chairman Howard Marks

Chairman Howard Marks founded Oaktree Capital Group LLC in 1995 with Bruce Karsh and five other partners from investment firm TCW Group Inc.. Photographer: Victor J. Blue/ Bloomberg

Oaktree Capital Group LLC (OAK:US), the world’s largest distressed-debt investor, plans to raise a fund designed to take advantage of a pullback in European lending, according to three people familiar with the matter.

Oaktree European Dislocation Fund LP will lend to companies with low levels of debt, said the people, asking not to be named because the information isn’t public. The fund could be in the range of 250 million euros ($335 million) to 500 million euros, they said.

Some asset managers are seeking to step in after banks scaled back lending following the 2008 financial crisis. In Europe, Haymarket Financial LLP, a London-based specialist finance company, and BlueBay Asset Management LLP are both seeking 500 million euros for funds that will lend to so-called middle-market companies. A larger group of firms including KKR & Co. (KKR:US)and Carlyle Group LP (CG:US) are seeking capital to lend to U.S. mid-size businesses.

Andrea Williams, head of investor relations at Los Angeles- based Oaktree, declined to comment on the fundraising plans.

The new fund will make primary investments and lend directly rather than purchase secondary debt, two of the people said. The firm has the ability to leverage the fund as much as 30 percent, two of the people said.

Fund Manager

The fund will be managed by Caleb Kramer, a portfolio manager for Oaktree’s control-investing strategy in Europe, the two people said.

Oaktree raised 3 billion euros in 2011 for its third (PEF8972:US) European-focused fund that focuses on taking control of distressed European companies through debt or equity. Kramer, who joined Oaktree in 2000, previously co-founded private-equity firm Seneca Capital Partners LLC.

Howard Marks founded Oaktree in 1995 with Bruce Karsh and five other partners from investment firm TCW Group Inc.

The firm, which managed $77.1 billion as of Dec. 31, 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, two people with knowledge of the matter said this month. Last year, it raised $4.8 billion for its latest fund that seeks to purchase debt from ailing companies without taking control.

The firm also manages strategies dedicated to the emerging markets, and has funds for real estate, corporate debt and mezzanine investing, according to its website.

To contact the reporter on this story: Sabrina Willmer in New York at swillmer2@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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Companies Mentioned

  • OAK
    (Oaktree Capital Group LLC)
    • $51.8 USD
    • 1.33
    • 2.57%
  • KKR
    (KKR & Co LP)
    • $22.49 USD
    • 0.01
    • 0.04%
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