Oaktree exceeds target on flagship vehicle as fundraising blooms

Oaktree Capital Group said its 10th flagship fund neared the $11 billion mark in the first quarter as volatile financial and credit markets failed to derail capital-raising for the credit-focused giant.

At that total, the 10th fund, which is split into an A and B structure, is exceeding its original $10 billion target. Fund X was targeting $3 billion. Fund Xb was targeting $7 billion for opportunistic investments but will be activated only after Fund X is deployed.

“All in all, it is shaping up to be another good year for fundraising for a number of our established fund strategies, as well as for newer Oaktree funds in their first or second generation,” Chief Executive Jay Wintrob said in a conference call with Wall Street analysts.

Oaktree said rocky credit markets in the first quarter have since smoothed out, but the firm maintained a steady pace of fundraising throughout.

Oaktree expects additional closes for Oaktree Opportunities Fund Xb; Real Estate Opportunities Fund VII, for which it expects to raise more than $3 billion; and European Capital Solutions. The firm held a close on Oaktree European Capital Solutions Fund, which is expected to exceed $738 million, or 650 million euros, Wintrob said.

It’s also eyeing first closes for European Principal Opportunities Fund IV and Infrastructure Fund I, along with first closes for Real Estate Debt Fund II and new separate accounts for its real estate value add strategy.

It’s also in the market with Oaktree Real Estate Debt Fund II, a follow-up to its $1.1 billion predecessor.

“We feel good about the pipeline,” Wintrob said. “We feel good about the activity, and we just need to continue steady on the course, and focus on getting these things completed or further along over the course of the year.”

Wintrob said its $1.2 billion Oaktree Principal Fund VI is about 50 percent deployed.

The comments came as the firm said its net income fell to $28 million from $38.3 million. Adjusted net income dipped to $105 million from $150 million on lower incentive income and a decline in investment income.

Action Item: Oaktree first quarter earnings, http://1.usa.gov/26ydEgb

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