Oak Hill Special Opportunity Management, an affiliate of Oak Hill Advisors and Oak Hill Capital Management run by billionaire Robert Bass and his investment team, is out raising additional capital for the Oak Hill entities' first dedicated distressed debt fund. The fund will invest in both bonds and bank debt of distressed companies and will also look to take private equity stakes in distressed companies. It is primarily active and seeks to control and influence companies, an industry official familiar with the situation told Alternative Investment News an LMW sister publication. The Oak Hill Special Opportunities Fund had a first closing about eight months ago and raised approximately $300 million, the official said. Oak Hill is planning a second closing in the third quarter and is hoping to hit a total of $500 million, he said.
Glenn August, a managing partner for the fund, said the firm was delighted with the high quality of investors in the fund and was excited to be deploying capital in the distressed space. August declined to elaborate. The fund began investing following its first closing and so far has made one investment, the official said.
Oak Hill's fundraising total will likely fall short of its initial goal of $750 million, the official said. Private equity market participants, however, said that even $300 million would not be a bad effort for any firm's first foray into a new fund style. The firm has previously managed distressed assets through different partnerships, but this marks the first time it has come out with a fund dedicated to distressed investing. Bass and the Oak Hill management team have made a $37.5 million capital commitment to the fund, the official said. Oak Hill is using Citigroup to assist with capital raising. A Citi spokesman declined comment.