LA-Based Oaktree Capital Closes $15.9B Opportunistic Fund: Updated

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Los Angeles-based Oaktree Capital Management announced it has built a major opportunistic fund and the largest in the firm’s history at $15.9 billion. 

Oaktree Opportunities Fund XI exceeds the firm’s original target by about $900 million. Oaktree has invested or committed approximately 70 percent of the fund’s capital opportunities across sectors and asset classes around the world. A source familiar with the strategy told Commercial Observer that the fund is spread across various sectors, including industries that were negatively impacted by the pandemic, real estate management and development, entertainment, and airlines.

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It will be used for both public and private investments by providing capital to borrowers with limited access to capital, investing in out-of-favor industries, and creating platforms to exploit undervalued, niche, or dislocation-driven opportunities.

Oaktree has been investing in distressed debt for more than 25 years. Earlier this year, the firm raised approximately $4.7 billion to acquire undervalued assets. However, Oaktree recently changed the name of its Distressed Opportunities strategy to Global Opportunities strategy, with an increasingly flexible approach. 

Co-founder and CIO Bruce Karsh said in a statement that the fund can invest at every level of the capital structure, “in securities across the world, in companies or hard assets, and in unusual instruments and special situations.”

“When the environment is favorable for distressed debt, we have the flexibility to weight such investments more heavily,” Karsh said. “When the supply is less plentiful, we can increase purchases of non-distressed value investments.”

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.