The European leveraged loan market has grown considerably in recent years, as private equity firms have made greater use of senior secured, floating rate debt to fund acquisitions. Alongside traditional bank lenders, institutional investors like Oaktree have become active buyers of this debt. By concentrating on below-investment-grade syndicated loans (and employing moderate leverage), the strategy seeks high current income while maintaining a focus on preserving principal.

"We approach credit investing as long-term lenders, not as traders or market timers," says portfolio manager Nazar Sharif. "We utilize proven credit analysis methods, with an emphasis on bottom-up cash flow modeling, supported by a disciplined review and control process."

We invest in senior secured and second lien debt, syndicated mezzanine transactions, and high yield bonds on an opportunistic basis. Any leverage employed is applied to the senior and second lien investments. The strategy benefits from the experience and expertise of Oaktree's European high yield bond team, with whom Nazar worked previously in his role as co-portfolio manager.

Click here for information regarding risk disclosures associated with the strategy.