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 Shannon Ward. "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 from a variety of issuers in Western Europe. The majority of the portfolio consists of LIBOR-based, floating rate obligations. However, we opportunistically invest in senior secured, fixed rate bond issues. The strategy benefits from the experience and expertise of Oaktree's European high yield bond team, which began its efforts in 1999.

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