Oaktree plans follow-up to billion-dollar CRE debt fund

Oaktree Capital Group is planning the launch of its second commercial real estate debt fund, which could target as much as $1 billion in capital commitments.

Oaktree Capital Group is planning the launch of its second commercial real estate debt fund, which could target more than $1 billion in capital commitments.

The fund follows the Oaktree Real Estate Debt Fund, which had a three-year investment period between September 2013 and September 2016, with a total capital commitment of $1.112 billion.

Oaktree-CapitalThe Los Angeles-based firm, understood to be the world’s largest distressed debt investor, disclosed the plans for the new fund in a recent earnings call but declined to comment on its precise fundraising target.

The firm attracted $2.8 billion in the fourth quarter and raised $23.1 billion of new gross capital in 2015, a record for any calendar year in its history, Oaktree CEO Jay Wintrob said during the call.

But the largest amounts raised went to closed-end funds, none of which target commercial real estate debt specifically: $10.5 billion for the Opportunities Funds Xa and Xb, $2.1 billion for Real Estate Opportunities Fund VII, $1.1 billion for Power Opportunities Fund IV and $1.7 billion for enhanced income funds and CLOs, including leverage.

Additional areas of product development in 2016 include a new “stepout strategy of value add real estate to complement the success of our opportunistic real estate funds” and an advisory mandate with a P&C reinsurance partner,” Wintrob said.

He added: “We will be marketing several of our open-ended evergreen fund strategies, as well as exploring a healthy pipeline of other product and asset growth opportunities.”

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