Eyeing $20 bln in fresh capital, Oaktree sets closings on three funds

Oaktree said it expects to raise about $20 billion in closed-end capital through the middle of 2016.

All told, Oaktree has about $10 billion in dry powder, plus it’s targeting another $10 billion for its flagship, Oaktree Opportunities Funds Xa and Xb. Fund Xa is targeting $3 billion, with another $7 billion planned for Xb, a standby fund for distressed assets.

“The first close of those funds is days away and we think that it will be a substantial close,” Howard Marks, Oaktree Capital co-chairman, said on the firm’s fourth-quarter earnings call Feb. 9.

“If the environment were to darken further, such that there is more distress, then at our option, we can swing into investing the capital for Fund Xb whenever we want,” Marks said. “So the point is we’re going to have a lot of capital.”

Oaktree’s Power Opportunities Fund IV is expected to have its first and possibly only closing by the end of March, but executives did not say how much the fund would raise. Power Opportunities Fund III drew in $1.1 billion.

The firm said it expects to hold a first close early in the second quarter for Real Estate Opportunities Fund VII, which may raise as much as $3.5 billion, according to a presentation to the Ohio Highway Patrol Retirement System.

Oaktree is also launching its first infrastructure fund later in 2015, in partnership with Highstar Capital.

Of the $14.7 billion raised in the past year, Oaktree said about $8 billion came for funds focused on senior loans, strategic credit, emerging markets debt and equities and real estate. Most of the capital was raised in the first three quarters of 2014, with $2.3 billion getting raised in Q4. The firm also added $2.3 billion to its AUM through its acquisition of Highstar.

“Our largest-ever marketing pipeline will further that growth in 2015 and beyond,” Oaktree CFO David Kirchheimer said.

Among Oaktree’s LPs, Washington State Investment Board committed $200 million to Oaktree Opportunities Fund X and $400 million to Fund Xb at its Jan. 15 meeting.

In December, the Ohio Highway Patrol Retirement System committed $10 million to Oaktree Real Estate Opportunities Fund VII.

Oaktree is also marketing Oaktree Mezzanine Fund IV LP and Oaktree Principal Fund VI LP.

Photo courtesy of iStock/julos