Oaktree's head of mezzanine departs

Bill Sacher, who has led Oaktree's mezzanine unit for 13 years, has left the firm following a disagreement about strategy.

Oaktree Capital Group's head of mezzanine, Bill Sacher, has departed the firm after 13 years, a source close to the firm confirmed today.

The departure was the result of “differing views as to how to develop an integrated mezzanine and private debt business that will best position us going forward,” the firm's chairman Howard Marks, president Bruce Karsh and managing principal John Frank said in a letter to investors sent earlier this month.

“While we have respect for Bill and wish him well, we’re confident that both the mezz effort and our plans to expand in direct lending are on a sound path,” the trio added.

Sacher joined Oaktree in 2001 from JPMorgan Chase where he was co-head of the bank's high yield origination group.

Sacher was listed as a key man in Oaktree's mezzanine fund documentation, and the firm is understood to be seeking approval from LPs to replace him with managing directors Raj Makam and Bill Casperson in order to continue investing the remaining capital in the firm's third mezzanine fund. It was 83 percent invested at the end of Q1.

Oaktree is in the process of raising its fourth mezzanine fund, expected to be of a similar size to the $1.6 billion Fund III. Bloomberg, which broke the news of Sacher's departure, reported that investors who have already committed to the new fund have been offered the chance to reconsider their investment following Sacher's exit.

Oaktree has raised $3.6 billion across three mezzanine funds since 2001, a small proportion of its overall $91.1 billion of AUM as of June 30.

Sacher could not be reached for comment at the time of going to press. The firm declined to comment.