Drawing on years of experience in senior loan and real estate debt investing, Oaktree’s Structured Credit strategy seeks to outperform traditional debt alternatives, while offering superior liquidity relative to private credit offerings. The strategy employs a bottom-up approach to construct diversified portfolios and evaluates opportunities across the structured credit universe based on our relative value assessment. These instruments may include collateralized loan obligations (CLOs), commercial mortgage-backed securities (CMBS) and other asset-backed securities. Securitizations offer a complexity premium and are typically characterized by strong structural protections and investor-friendly features, including covenants, asset-class and sub-sector diversity, and excess collateral coverage.
A key tenet of our Structured Credit strategy is our focus on selecting investments with superior risk-adjusted return profiles that we deem to have significant margins of safety and will be unlikely to suffer losses or downgrades. We identify these opportunities through Oaktree’s deep relationships and are able to leverage Oaktree’s integrated investment platform, extensive research capabilities and considerable experience investing in sub-investment grade credit.
“The complexity inherent in structured credit makes it a suitable investment for Oaktree given our experience and deep expertise in assessing the intrinsic value of the underlying collateral or credit,” says managing director Brendan Beer, who co-leads the Structured Credit investment team with managing director Justin Guichard. “In addition,” says Mr. Guichard, “we believe our ability to collaborate with many members of Oaktree’s credit and real estate investment teams allows our strategy to identify attractive investment opportunities, manage risk, and maximize return potential for our clients.”