OHA sails past $2bn distressed target – exclusive

The sub-investment grade specialist has collected more than its target for its latest distressed fund and is expected to close on $2.5bn soon.

Oak Hill Advisors (OHA) has already gathered more money than its target for its global distressed vehicle. The OHA Strategic Credit Fund II, which is investing in North America and Europe, held an interim close on $2 billion last month and is expected to complete a final close on $2.5 billion soon, according to investors familiar with the vehicle.

OHA declined to comment.

The firm began raising money for this vehicle last fall, as PDI exclusively reported. LPs in the fund so far include the Louisiana State Employees Retirement System, the San Francisco Employees Retirement System and the New York State Common Retirement Fund, among others.

Strategic Credit Fund II is Oak Hill’s first fund dedicated to both the US and Europe. The previous OHA Strategic Credit Fund closed on $1.125 billion in 2009. It targeted stressed and distressed loans, bonds and other investments in the US. The firm has been harvesting the money in this fund for the past couple of years and it posted more than 20 percent net IRR.

In 2012, the OHA European Strategic Credit Fund closed on its $1.35 billion hard-cap. This was the firm’s first dedicated European distressed fund, though Oak Hill had already been investing in the region for years. “This fund highlights our confidence in the quality of the European distressed opportunity as well our growing commitment to the European credit markets,” said portfolio manager Scott Krase in a statement at the time.

Other recent developments at the firm include Alan Schrager stepping up to the role of senior partner, replacing Krase. Krase, who remains a senior advisor at the firm, has been reducing his day-to-day activities at OHA over the past year or two. After spending a few years working in the London office and overseeing European investments, he has now returned to New York, PDI understands. Schrager, who is also based in New York, stepped into the senior partner role towards the end of last year. He 

was already a portfolio manager with OHA overseeing many of the firm’s strategies and funds.

The rest of Oak Hill’s senior partners include founder and chief executive Glenn August (pictured), president Bill Bohnsack and chief investment officer Robert Okun.  

The firm opened a Hong Kong office last year to better work with local investors in Asia. Managing director Ohkee Peter Kwon now looks after marketing and client relations out of Hong Kong. He was previously a managing director at the Royal Bank of Scotland in North Asia financial institutional sales. OHA’s other client relations professional in Asia is director Sygne Brandt in Sydney. She has worked for Oak Hill for the past five years. 

 

The firm is headquartered in New York, with offices in Fort Worth, Texas, Los Angeles and London. Oak Hill has about $27 billion in assets under management across performing and distressed credit in North America and Europe.