Oaktree established the U.S. Private Debt strategy as a step-out of the U.S. High Yield Bond strategy, calling on Oaktree’s expertise in sub-investment-grade lending, private equity and, when needed, restructuring. The U.S. Private Debt strategy seeks to achieve attractive, risk-adjusted absolute returns by originating or participating in the syndication of performing debt issued privately by U.S. borrowers. Initially focused on mezzanine financings, the strategy has evolved to include directly originated senior loans.
“We source transactions from our extensive relationships in the private equity, intermediary and banking communities. Our group targets investments in companies that are unable to access widely available financing sources for leveraged buyouts, recapitalizations, acquisitions and corporate growth," says Bill Casperson, co-portfolio manager. "We look for companies with a strong relative market position and a well-developed business strategy, in addition to sustainable cash flows and a proven management team," adds co-portfolio manager Raj Makam.
The key elements of our approach include working with experienced management teams and strong equity sponsors, conducting thorough due diligence for every transaction, avoiding overpriced transactions, targeting conservative deal structures, participating in company governance (through board seats or observer rights) and actively monitoring investments to stay ahead of potential credit issues.