Oaktree Capital Management, one of the largest distressed debt money managers, will be shopping in the secondary loan market for distressed credits in the new year now that the firm completed raising a little over $2.1 billion for the final closing on its OCM Opportunity Fund IV. Howard Marks, chairman of the Los-Angeles-based firm, said it is looking for bargains in a volatile market. Marks declined to be specific about credits the fund is eyeing, including Enron and other well publicized distressed names. The increase in available distressed deals as a result of bankruptcy filings makes it a good time for the fund to invest, he said. A percentage of the fund will invest in high-yield bonds as well as loans, but Marks said it's impossible to determine percentages in advance. Future market conditions will determine the breakdown.
Last week marked the fourth and final closing of the fund which raised $1.5 billion in total during closings in September, October, and November. Marks said his fund is considering a follow-on fund between $500 million and $2 billion next year. He said the decision to move forward will be based on whether or not market conditions allow for successful investment of current capital. A decision regarding another opening will most likely take place at the end of first quarter 2002.