The Teachers’ Retirement System of Louisiana committed $75 million to Oak Hill Advisors’ debut non-performing loan fund at its meeting Tuesday, private markets director Maurice Coleman confirmed.
OHA Newbury Partners is targeting $750 million with a $1 billion hard-cap. The fund will invest in residential non-performing loans at a discounted purchase price with a specific focus on pools of loans consisting of early stage delinquencies and pre-foreclosures, according to retirement system documents.
Oak Hill founder Glenn August and structured products group co-heads Jason Serrano and Goran Puljic hold seats on the vehicle’s investment committee. The fund is expected to be “largely run by” Serrano, according to a Hamilton Lane report.
Serrano could not be reached for comment at press time.
Although non-performing loans represent a new fund strategy for the firm, Oak Hill has done well in 11 previous non-fund investments, according to the Hamilton Lane report. The firm’s unrealised Newbury Partners investments had generated a 13.9 percent net internal rate of return as of 31 March, according to the report.
The vehicle has already completed its first investment, acquiring a pool of 532 non-performing loans from a “major bank” at a significant discount, according to Hamilton Lane.
August founded Oak Hill in 1991. The firm maintains offices in New York City, London, Sydney and Fort Worth, Texas. In addition to its non-performing loan strategy, Oak Hill also has credit hedge funds, credit opportunity funds, distressed funds, customised accounts, specialty funds and CLOs.
Louisiana Teachers’ investment committee committed $125 million to private credit related strategies at its July meeting. The $14.7 billion retirement system’s private market debt portfolio was valued at $675 million as of 30 June.
Chelsea Stevenson contributed to this report.