Oaktree Capital Management, which held its earnings announcement and conference call last week, shared plans to raise and invest a multitude of new funds. The firm’s most recent funds finished investing in 2012 or earlier, but the private equity and credit giant now has many more irons in the fire.
David Kirchheimer, chief financial and administrative officer, told analysts and reporters on the call that the firm recently started raising money for its Real Estate Fund VII, after recently closing the last one at $2.7 billion. The firm is also in the market with its Mezzanine Fund IV and Principal Opportunities Fund VI. Oaktree, which is headed by storied investor Howard Marks, also plans to start fundraising for a new distressed debt fund later this year, its Opportunities Fund X. The firm expects to start raising money for a new Power Opportunities Fund early next year, as well as an infrastructure fund later in 2015.
John Frank, managing principal at Oaktree, also said that the firm has started issuing CLOs and plans to do more. Oaktree has a second enhanced income fund in the works, which is a levered senior loan strategy. It had its first close in April and is expected to reach $2 billion.
The firm also announced that it raised gross capital of $5 billion in the second quarter and $16 billion in the last year, which is the most money it has raised in the last six years. Since going public two years ago, the firm has raised $29 billion in gross capital, including $10 billion for its newly launched strategies, Frank said. He added that Oaktree executives don’t think the time is right yet for a new distressed strategy, but plans to go out to market with one in the near future, so Oaktree has the money to invest when another market correction occurs. “When the excesses that are becoming apparent in the marketplace eventually lead to a correction, our distressed debt team will be ready to help our clients reap the benefit of the significant opportunities that will emerge,” he said.
Oaktree’s closed-end funds had an aggregate gross return of 3.7 percent in the second quarter, bringing the returns for the year to 18.4 percent. Long-term as of June 30, the gross IRR for all the closed-end funds since inception was 20 percent. All 48 of those funds—that are more than a year old—had positive gross IRR since inception and 43 of them were at or above an 8 percent hurdle rate. The closed-end funds raised $6 billion in the last 12 months. With real estate debt, European private debt and emerging markets distressed debt accounting for a third of that money.
Total firm AUM also grew to an all-time high of $91 billion, which is a 6 percent increase from the past three months and 19 percent uptick from one year ago.