T. Rowe Price, Oak Hill Launch $1.5B Private Credit Fund

T. Rowe Price and Oak Hill Advisors have partnered to launch the T. Rowe Price OHA Select Private Credit Fund (OCREDIT), which has already raised $1.5 billion, making it one of the industry’s largest non-traded business development company (BDC) launches.

T. Rowe Price and global institutional investors raised more than $600 million in equity, in addition to $875 million in credit facility commitments. Individual investors will also be able to invest in the fund.

OCREDIT is a perpetual-life BDC, which means it invests in small and mid-sized businesses as well as distressed businesses. The fund anticipates investing at least 80% of its total assets (net assets + investment borrowings) in private credit investments.

“We believe that directly originated loans at the top of the capital structure offer the most attractive absolute and relative value in corporate credit currently,” said Alan Schrager, senior partner and portfolio manager at OHA and chairman of OCREDIT.

The fund aims to capitalize on continued growth in the private credit markets, which is projected to expand from $1.5 trillion at the end of 2022 to $2.3 trillion by the end of 2027, according to data from Preqin.

OHA presently has a $61 billion credit platform, while T Rowe Price has been an investment management expert since 1937, handling $1.4 trillion.

T Rowe Price acquired Oak Hill Advisors at the end of 2021 to accelerate its expansion into alternative markets.