(Reuters) – Distressed investment specialist Oaktree Capital Management has raised about 1.8 billion euros ($2.2 billion) for a fund targeting hard-hit companies in Europe, up from the 1.25 billion it had originally sought, the Los Angeles Times said.
Los Angeles-based Oaktree’s OCM European Principal Opportunities Fund II has been boosted by contrarian investors eager to invest in funds targeting distressed firms at a time when many are shunning risky investments of all kinds, the paper said.
The company, which buys the bonds of distressed companies cheaply and waits for their value to rise, will seek to gain control of companies by swapping their debt for equity, the paper said.
As long as the financial system and the economy don’t crumble, now is shaping up to be a great moment for distressed investing, Chairman Howard Marks told the paper in an interview.
“Opportunities are rife in number, and (distressed bonds) seem cheap on their face,” he said.
“But ironically the only negative is that there might almost be too much distress. We need a financial system that remains viable,” Marks told the paper.
(Reporting by Sakthi Prasad in Bangalore; editing by Simon Jessop )