Oaktree closes opportunities fund at $15.9bn, the largest private debt fund ever raised

The fund surpassed its original target, and topped the previous record holder, a Goldman Sachs mezzanine fund, which raised $13bn in 2008.

Global investment manager Oaktree Capital Management has held a final close of its eleventh opportunities fund at $15.9 billion, according to a news release.

The Oaktree Opportunities Fund XI is the largest private debt fund ever raised, according to PDI research. It was launched in July of last year and exceeded its original target of $15 billion.

The Los Angeles-headquartered Oaktree’s fund has already invested or has committed to invest seventy percent of its capital, the firm said. It will invest in a mix of opportunities varying across geographies, sectors and asset classes made possible due to its all-weather, broad and flexible investment charter into both public and private investments.

“Oaktree has a long track record of navigating and investing through economic cycles,” said Bruce Karsh, co-chairman and chief investment officer at Oaktree and portfolio manager of the global opportunities strategy, in the release. “This latest oversubscribed fund is further validation of our investors’ confidence in our team.”

“Investing through many cycles requires the flexibility to transact in a variety of situations,” said Robert O’Leary, co-portfolio manager and head of North America for the global opportunities strategy, in the release. “Our strong deployment activity over the last 16 months demonstrates Oaktree’s ability to quickly execute and provide solutions across the capital structure in a diverse and swiftly evolving opportunity set.”

The fund’s limited partner commitments include $350 million from the Oregon State Treasury, a public pension fund; $350 million from the Investment Management Corporation of Ontario, an asset manager; and $300 million form the Virginia Retirement System, a public pension fund, among others, according to PDI research. A majority of the investors of the fund were from North America, a source familiar with the firm said.

The $15.9 billion Oaktree fund surpassed Goldman Sachs Asset Management’s $13 billion GS Mezzanine which closed in March 2008, as the largest private debt fund ever raised, according to PDI research.

Oaktree’s opportunistic credit investment focus, which was called “distressed opportunities” in its inception more than 25 years ago, brings together distressed bank debt, defaulted securities and bankruptcy situations across companies and assets. The global opportunities strategy holds a total of $36 billion in assets under management as of September 30, 2021. Oaktree declined to provide more details about the latest opportunities fund.

Oaktree Capital Management specialises in alternative investments with an emphasis on opportunistic approaches to investments in credit, private equity, real assets and listed equities. It had $158 billion in assets under management as of September 30.