University Endowment Makes First Investment In Distressed

  • 13 Oct 2002
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The Catholic University of America has made its first foray into distressed debt, investing $4 million in the asset class, according to Ralph Beaudoin, v.p. of finance and treasurer. The roughly $130 million endowment decided to enter the distressed arena because the asset class is performing well at a time when few other investments are, Beaudoin said, emphasizing the counter-cyclical nature of distressed debt. "Distressed is having its day in the sun," he added.

Oaktree Capital Management was selected to run the new distressed debt mandate following a formal search process. The Los Angeles-based money manager was chosen over one other undisclosed finalist based on its long and successful track record with the asset class, Beaudoin said. He added that Catholic University was assisted in the search by its consultant, Cambridge Associates. The mandate, which was awarded last month, will be invested through Oaktree's $1 billion OCM Opportunities Fund IV-B. An official at Cambridge Associates declined to comment, while calls to Oaktree were not returned by press time.

The endowment's $4 million investment in distressed debt is a stand-alone allocation, Beaudoin noted, adding that the current commitment is the only investment in the asset class that Catholic University is planning. The endowment, however, always has the option of adding on to the investment at a later date, he pointed out. Funds for the allocation came from a reduction in the endowment's hedge fund commitment.

  • 13 Oct 2002

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