Oaktree launched the Real Estate Debt strategy in 2010 as an expansion of the Real Estate Opportunities strategy. The first portfolio under this strategy umbrella was formed to purchase so called “toxic securities” – residential and commercial mortgage backed securities priced at significant discounts to par, which reflected the excessive use of leverage leading up the 2007-2008 global financial crisis. The Real Estate Debt strategy seeks to achieve attractive risk-adjusted returns and produce current income by investing in real estate-related debt that is not anticipated to result in control of the underlying asset.
The strategy specializes in debt-driven opportunities across the Real Estate group’s six areas of investment focus (commercial real estate, real estate-related corporate investments, structure finance, commercial NPLs, residential real estate and non-U.S. real estate), and pursues a wide range of investments, including CMBS, commercial and residential mortgages, mezzanine loans, and corporate debt.
"We have a competitive advantage in our ability to identify an enhanced opportunity set by looking across a number of investment areas and by drawing upon Oaktree’s expertise in credit,” says John Brady, head of global real estate. Mr. Brady adds, “this strategy enables us to leverage our team and platform to capture a wider range of those debt-oriented opportunities we find to be attractive."
Our approach adheres to Oaktree’s investment philosophy of risk control, consistency and bottom-up analysis. The Real Estate team works in close collaboration with other Oaktree investment teams and an established network of high quality partners throughout the research and investment management process.