Oak Hill Advisors is in the market with a new collateralized loan obligation and is also planning to launch a high-yield fund later this year. Deutsche Bank is the lead underwriter for the $400 million CLO, called Oak Hill Credit Partners III, said a source. At the beginning of this year, Deutsche Bank raised the debt backing a $500 million CLO called Oak Hill Credit Partners II (LMW, 2/23). Portfolio manager Scott Krase did not return calls.
The loan management firm is also seeking to raise money for Oak Hill Credit Fund. This will invest in secured loans, second-lien debt, convertible securities, trade claims, options, swaps and public and private non-investment grade bonds, according to a marketing document obtained by sister publication Alternative Investment News. The fund is expected to invest in both the secondary and new issue markets, and may from time to time originate certain investments.
The fund will take long and short positions based on credit analysis and could also make both capital structure arbitrage and event-related plays with companies involved in refinancing, restructuring, exchange offers and other extraordinary transactions. The fund could invest 20-40% in leveraged term loans and revolving bank debt, 25-50% in high-yield bonds, 30-50% in hedged trades and outright shorts, 10-20% in stressed and distressed and 10-20% in other investments, according to the document. The loan investment firm is run by billionaire Robert Bass and already manages $4.4 billion. Other individuals at Oak Hill include Robert Okun, managing director and head trader, and Glenn August, Oak Hill's president.