LA-Based Oaktree Announces $3B Debt Fund

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Oaktree Capital Management announced on Tuesday that it closed a global real estate debt fund of $3 billion, about 34 percent larger than its most previous debt vehicle.

Real Estate Debt Fund III closed in December, and it’s the largest for Oaktree’s real estate debt strategy. Oaktree said the fund will invest broadly in commercial and residential real estate debt opportunities around the world, taking advantage of the inflationary environment and floating-rate nature of the global markets.

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As of December 31, the fund had deployed $1.6 billion, more than half of its total capital, in the U.S., Europe and Australia. And it will continue to target commercial and residential first mortgages, commercial property mezzanine loans, real estate structured credit and real estate-related corporate debt.

“Our focus is on private loans and traded debt securities offering attractive relative value within the real estate industry that compare favorably with the rest of the broader credit landscape,” Justin Guichard, managing director at Oaktree, said in a statement. “This ability to pivot to the most attractive opportunities available at any given time served us well as markets shifted in 2020 and 2021, and we believe it will continue to be a key driver of success going forward.”

Los Angeles-based Oaktree specializes in alternative investments, with $166 billion in assets under management, and $16 billion in assets under management across its opportunistic, debt and income strategies. At the end of last year, the firm teamed with Trinity Fund Advisors to buy the 305-room W Hollywood hotel in Hollywood for $197 million. Earlier in 2021, Oaktree closed a $15.9 billion opportunistic fund, as well as a $4.7 billion vehicle to target distressed assets.

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