Oaktree Capital Closes $3B Special Situations Fund

Oaktree Capital Management has raised $3 billion to close its latest special situations fund, which targets businesses with financial issues or excessive debt.

The fund exceeded its target of $2.5 billion and was nearly 30% larger than Special Situations Fund II and its related vehicles.

Limited Partners committed to the new raise include Minnesota State Board of Investment, which agreed to invest $200 million.

Oaktree’s Special Situations strategy makes control or “significant-influence-oriented” private equity and debt investments in middle-market companies experiencing temporary challenges, stress or distress, or are seeking an alternative to traditional capital markets.

The all-weather strategy seeks to generate private-equity-like returns while taking credit-like risk.

The fund will invest primarily in North America across consumer products, gaming, industrials, healthcare, media/entertainment, business and financial services and food & beverage sectors.

To date, the fund has invested approximately one-third of its capital. The firm targets investments between $125 million and $150 million through the strategy.