Oak Hill Advisors Closes $2.3B Distressed Debt Fund 

Oak Hill Advisors (OHA) closed its third distressed debt fund, OHA Strategic Credit Fund III, at $2.3 billion, with the majority of the capital coming from current investors. 

The fund will invest across the capital structure, from senior secured debt to equity, in opportunities in North America and Western Europe. 

The Louisiana Teachers’ Retirement System and the New York State Common Retirement Fund are among the fund’s investors. Its predecessor fund closed in 2016 and started investing in 2017, with capital deployment accelerating as a result of the COVID dislocation. Fund II began its harvest period in April 2021, with $3.8 billion invested. 

“We believe that the distressed opportunity set is growing significantly as companies in the leveraged finance market are increasingly affected by higher interest rates, a more challenging macroeconomic environment, geopolitical uncertainty and other factors, including reduced liquidity and upcoming maturities,” said Glenn August, founder and CEO of OHA. 

OHA specializes in private lending, distressed credit, structured credit, real assets, special situations, leveraged loans and high yield bonds. The firm managed approximately $61 billion of capital across credit strategies in pooled funds, collateralized loan obligations and single investor mandates as of June 30. 

The firm has invested over $20 billion within its distressed strategy since 1990. 

OHA is the private markets platform of T. Rowe Price Group. Recently, the firms teamed up to establish a BDC offering geared toward retail investors.