Oaktree Launches Private Credit-Focused Offering

Editorial Staff

1 March 2023

Oaktree Capital Management has launched private credit-focused Oaktree Lending Partners and its related vehicles.

OLP is targeting $10 billion in equity commitments from institutional investors, Oaktree said in a statement.

The new entity seeks to originate senior secured loans of $500 million or more to private equity-owned US companies, typically with over $100 million in EBITDA.

“Oaktree believes this market is especially attractive now, given the limited availability of debt capital to finance large leveraged buyouts and the record-high levels of committed private equity capital yet to be deployed, requiring financing,” the firm said.

The business argues that this imbalance has been driven by the retreat of banks from this form of lending and the constrained capacity of non-bank lenders that are fully invested and/or managing demands with prior investments. It argues that yields on large LBO loans have increased significantly in the last year, averaging 12.4 per cent at year-end. The rise is mainly caused by central banks raising interest rates.

Oaktree, which specializes on alternative investments, oversees a total of $170 billion in assets under management as of December 31, 2022. The firm created its private credit platform in 2001 and runs about $25 billion in private debt strategies as well as in its 17Capital NAV-based financing business.