US Special: Private debt Q2 earnings roundup

$84.7bn – Record AUM

Blackstone's credit arm posted strong returns for the second quarter, as its energy exposure rebounded. GSO's performing credit segment, which includes mezzanine funds and BDCs, posted 9.7 percent returns in the quarter, while the distressed funds delivered 7.3 percent. The last two quarters saw GSO posting negative or flat returns because of mark-to-market declines in energy investments. Fundraising in Q2 included $3.3 billion coming into GSO's third mezzanine fund, $1.2 billion for two new CLOs and $960 million in a new opportunistic credit fund.
AUM: record $84.7 billion for GSO; record $356 billion for all of Blackstone 
GSO deployment: $1.7 billion in Q2, including the largest European unitranche loan yet made by an alternative lender at €660 million
Q2 fundraising: $21 billion for all of Blackstone

2% – Fall in GMS carry fund  valuations

Carlyle is undertaking a review of its global market strategies with an eye towards expanding loan origination and CLOs. Despite strong performance in its CLO business and distressed debt funds, challenges within the Claren Road Asset Management and Vermillion hedge funds caused a drop in fee-related earnings for GMS, Carlyle's debt business. GMS raised $1.6 billion during the three months ending in June, while its carry fund valuations fell by 2 percent, driven mostly by depreciation in its energy mezzanine fund.
GMS ENI: year-on-year-loss of $43 million
Carlyle pre-tax ENI: $158 million, up from $89 million q-o-q 
Carlyle AUM: $175.6 billion, down from $178 billion q-o-q 

9% gross – Q2 Lending Partners II  numbers  

KKR executives reported mixed performance for its alternative credit segment in the second quarter. The firm's flagship special situations fund showed flat returns, while its mezzanine fund generated 3 percent gross returns. KKR's Lending Partners II saw the strongest numbers at 9 percent gross in the second quarter and 12 percent year-to-date. KKR's second mezzanine fund, Private Credit Opportunities, is still in the market with a $2 billion goal. The firm is continuing to raise money for high-yield leveraged loans, CLOs and separate accounts. KKR plans to start fundraising for a third direct lending fund soon. 
ENI: $248.8 million, up from a $506 million loss in the first quarter 
AUM: $131 billion, a $4 billion increase q-o-q; 14 percent increase y-o-y 
Dry powder: record $38 billion, up 48 percent y-o-y

$332.8m –  Q2 revenues

Oaktree Capital Management brought in $1.8 billion more for its two US distressed debt funds, which positions the company well for the eventual turn in the credit cycle, executives said. Co-chairman Bruce Karsh said the firm may not begin tapping the Oaktree Opportunities Fund Xb, an $8 billion reserve fund, until 2017. The firm also reported bringing in $1.1 billion for its Oaktree Real Estate Opportunities Fund VII, along with $900 million for the Oaktree European Principal Fund IV. The firm is seeking capital for an infrastructure fund, a real estate debt vehicle and a European capital solutions series.
Funds raised in Q2: $6.4 billion
Dry powder: record $22.8 billion
Revenue in Q2: $332.8 million

$3.5bn – Target for EPF III fundraising

Apollo Global Management said it still has several funds raising capital as its credit business posted strong results for the second quarter and a large year-on-year gain in economic net income, driven primarily by a rise in the valuation of its insurance holding subsidiary Athene. Apollo's third European Principal Finance fund is expected to reach a first close in Q4. EPF III was launched in May with a $3.5 billion target. 
Credit ENI: $206 million, up from $110 million y-o-y and $112,000 q-o-q
Credit segment returns: 3.7 percent gross
Firm-wide ENI: $394.9 million, up from a $72.9 million loss reported in the first quarter
Inflows in credit: $12.5 billion
Credit AUM: $134 billion, up 20 percent y-o-y
Firm-wide AUM: $183.6 billion, up from $172.5 billion q-o-q

$1bn – Additional capital for ACE III

Ares Management reported gross new capital commitments of $3.9 billion in its credit segment in the second quarter. The largest capital came through additional commitments to its Ares Capital Europe III fund, at about $1 billion. The direct lending vehicle held a final close on €2.5 billion in June. The credit group also brought in $868 million in high-yield mandates, $578 million in structured credit and $400 million toward US direct lending.
AUM: $62.1 billion in credit, flat y-o-y; $95.3 billion total, an 8.8 percent increase y-o-y 

$7.3bn – Dry powder

The credit market is currently crowded, mispriced and uninteresting, according to executives speaking on Fortress Investment Group's second-quarter earnings call. Although the firm's credit funds have continued to perform well, management doubts that Fortress can find new lucrative investment opportunities in credit.
Pre-tax distributable income in credit: $73 million, up from $68 million q-o-q
Dry powder: $7.3 billion
AUM: $18 billion in credit; $70.2 billion total