Oaktree Capital Targets $10B Raise for New LBO Lending Strategy

The $170 billion credit investment manager Oaktree Capital aims to raise $10 billion over the next two years for a new fund – Oaktree Lending Partners (OLP) – that looks to fill a funding gap by financing large private leveraged buyouts (LBOs).

The fund will 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 LBOs and the record-high levels of committed private equity capital yet to be deployed, requiring financing.

The risk-adjusted return potential available in this segment of the market is currently more compelling than that of other more liquid asset classes and some other areas of private debt, according to Oaktree.

“We’re very excited to announce the launch of OLP. We feel this creates opportunities to lend at attractive rates for deals with strong covenants and low leverage ratios,” said Howard Marks, Co-Chairman of Oaktree.

Oaktree’s Private Credit platform was created in 2001 and manages approximately $24 billion across its global, US, and European private debt strategies.