Firms & Funds

Oaktree targets $1.75 bln for special situations

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South Carolina Retirement System Investment Commission, private equity, Providence
Vistitors check out the sights around the Angel Oak tree in Charleston, South Carolina September 24, 2013. Massive canopy shades stretching more than 17,000 square feet and a trunk wider than 25 feet in circumference have drawn generations of visitors to the centuries-old live oak tree on an island near historic Charleston. A group aiming to preserve the majestic tree for decades to come is racing against a fall deadline to raise the $1.2 million needed to protect surrounding land from development that environmentalists say would harm the oak's health. REUTERS/Randall Hill (UNITED STATES - Tags: ENVIRONMENT POLITICS) - RTR3FG1E
  • LPs to pay 1.6 pct management fee
  • Previous special-situations fund netting 29.4 pct IRR
  • Oaktree rebranded special-situations platform last year

Oaktree Capital Group is targeting $1.75 billion for its newest special-situations fund, pension documents show.

Oaktree Special Situations Fund II will make control investments in mid-market companies by buying distressed debt or making direct investments by using structured equity or traditional equity. The firm “generally intends to make friendly investments in cooperation with a target company’s existing management,” the documents say.

Oaktree’s managed special-situations funds for more than two decades. Those funds, known as Global Principal funds, were rebranded as Oaktree Special Situations in November 2016.

In a third-quarter earnings call, CEO Jay Wintrob said the firm was “enthusiastic” about the prospects of its second special-situations fund. The firm’s special-situations platform is led by Jordon Kruse and Matt Wilson. The duo also manages Oaktree Special Situations Fund I, which closed on $1.4 billion in late 2015.

That vehicle was netting a 29.4 percent internal rate of return, according to Oaktree’s Q3 report. Oaktree’s 2009 special-situations fund was netting a 3.4 percent IRR as of that date.

The general partner’s commitment to Fund II will equal at least 2.5 percent of the fund’s total capital, according to the documents. LPs will pay a 1.6 percent management fee.

Oaktree was founded in 1995. The firm had a little less than $100 billion under management as of the end of the third quarter, its most recent earnings release showed.

Action Item: For more on Oaktree, visit www.oaktreecapital.com

Visitors check out the sights around the Angel Oak tree in Charleston, South Carolina, on Sept. 24, 2013. Photo courtesy/Randall Hill