New York State Common inks $500 mln re-up with Oaktree

  • New commitment expands New York’s Oaktree commitments by more than 70 pct
  • New York an LP in six previous Oaktree funds
  • New York State Common has 7.8 pct allocation to PE

New York State Common Retirement Fundcommitted $500 million to Oaktree Capital Group’s flagship distressed fund in February, increasing its total allocations to the firm by more than 70 percent, according to a disclosure released by the pension system.

The $178.6 billion pension system inked its commitment to Oaktree Opportunities Fund Xb on Feb. 15, according to the disclosure.

Oaktree divided its 10th flagship distressed fund across two vehicles, Fund X and Fund Xb. The firm plans to invest the smaller Fund X first, then activate the larger Fund Xb once the market for distressed assets expands.

Fund X raised more than $3.2 billion and was roughly 74 percent invested as of Dec. 31, according to the Oaktree’s year-end report. Fund Xb had raised around $8.1 billion and had not been activated as of the same date.

“This is the time for increased selectivity and flexibility and that is what comes from moderation in fundraising, as well as patience in deploying our most opportunistic and counter-cyclical funds such as Opportunities Fund Xb,” Oaktree Co-Chairman Howard Marks said during the firm’s most recent earnings call.

Marks also noted that corporate default rates in the U.S. remain limited, and that the firm would likely focus its new funds on opportunities in the energy sector, as well as assets held by European sellers.

New York State Common has committed $675 million to the firm’s funds since its inception. New York State Common is a limited partner in six previous Oaktree funds, including its-crisis era Fund VIII and Fund VIIIb, which has a similar structure to Fund X and Xb.

New York State Common Retirement Fund had a 7.8 percent allocation as of March 31, 2016, according to its website. State Comptroller Thomas DiNapoli is the pension system’s sole trustee.

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