Owl Rock, formed by PE heavy hitters, nears $5 bln on debut

  • Owl Rock targeted $3 bln to $5 bln for its BDC
  • Expects to close fundraising in Q4
  • Credit fundraising stays strong

Everybody is raising a credit fund.

That is a common refrain in the market these days, a reflection of the push by firms to expand their businesses into credit. As well, some firms just starting out are making splashy debuts with new credit pools.

One of those shops is Owl Rock Capital Partners, led by GSO Capital founder Douglas Ostrover and KKR’s former global head of energy and infrastructure, Marc Lipschultz.

Owl Rock expects to collect around $5 billion by the fourth quarter for its business-development company, Owl Rock Capital Corp, according to a person with knowledge of the firm.

The firm was targeting $3 billion to $5 billion for the pool, including leverage. BDCs are allowed to hold as much as 1:1 leverage.

Park Hill Group is placement agent on the fundraising.

A spokeswoman for Owl Rock did not return a request for comment.

Owl Rock will lend to middle-market companies, mostly in the U.S. The BDC will invest in senior secured or unsecured loans, subordinated loans and mezzanine loans and, to a lesser extent, equity-related securities and warrants, an SEC filing shows. The firm’s typical credit investment will have maturities of three to 10 years, the filing said.

Fund I is charging a 1 percent management fee and a 20 percent carried interest rate with a 6 percent preferred return, documents from New Jersey Division of Investment show. The New Jersey agency committed $400 million to the BDC last year.

Other Owl Rock executives include Craig Packer, former co-head of leveraged finance in the Americas at Goldman Sachs, who is CEO of Owl Rock Capital; and Alan Kirshenbaum, chief operating and chief financial officer of Owl Rock Capital, Owl Rock Capital Partners and Owl Rock Capital Advisors. Kirshenbaum formerly was CFO of TPG Specialty Lending.

As of the second quarter, private-debt funds raised more than $100 billion over four quarters, alternative-assets-data provider Preqin says. In Q2, 26 debt funds held final closes on $16 billion, Preqin said. In early July, 311 private-debt funds sought a total of $145 billion, Preqin said.

Action Item: Check out Owl Rock’s Form ADV: http://bit.ly/2wvUEoU

Photo courtesy of Owl Rock Capital Partners