Oaktree mulls European direct lending fund

Distressed debt investment specialist Oaktree Capital Management is set to launch a European-focused direct lending fund to capitalise on dislocation in the continent’s credit markets.

Oaktree Capital Management, the distressed debt specialist led by Howard Marks, is poised to launch fundraising for a direct-lending vehicle dubbed European Dislocation Fund I. Designed to capitalise on the funding gap that is growing in Europe as banks retreat from lending to smaller companies, the fund will  lend to companies with low levels of existing debt, Bloomberg reports. The firm declined to comment on the fundraising plans. 

Oaktree’s previous activity in Europe has been based around distressed debt investing rather than lending to financing healthy companies.  

Howard MarksPrivate Debt Investor’s sister publication Private Equity International in January: “We’ve been here in Europe for about seven years. In that time, we’ve built relationships with financial institutions so they’ve come to realise what we can offer.” That offer appears to now include the provision of debt financing to European companies in need of capital with which to grow, rather than those in need of restructuring. 

The fund is understood to be targeting between €250  million and €500 million, the report said.  

A number of asset managers have developed direct-lending capabilities, including Ares Capital, Haymarket Financial, Fortress, and BlueBay Asset management among others.