* No target or amount raised for fund disclosed
* Predecessor near end of investment period
* Mezzanine fundraising rising
By Steve Gelsi
NEW YORK, March 7 (Reuters-BUYOUTS) - Oaktree Capital
Management has launched its fourth mezzanine fund as the
Los Angeles distressed asset investor moves toward the end of
the investment period for its fund series predecessor.
Oaktree Capital disclosed no fundraising target or amount
raised in a Feb. 26 Form D filing for Oaktree Mezzanine Fund IV.
The firm said in the filing that the first sale on the fund has
yet to occur and that it expects the offering to last more than
Chairman Howard Marks is listed as an executive officer of
the fund in the document, along with Chief Investment Officer
Brush Karsh and Directors Kevin Clayton, John Frank, Stephen
Kaplan, Lawrence Keele, David Kirchheimer and Sheldon Stone.
After branching out into mezzanine investing as a separate
strategy in 2001, Oaktree Capital raised a series of funds,
culminating with the $1.6 billion Oaktree Mezzanine Fund III in
Fund III's investment objective is to "earn a high current
return and achieve long-term capital appreciation" by building a
diversified portfolio of mezzanine debt and other junior
securities, with the size of investments in a single issuer
typically ranging between $20 million and $50 million, according
to a separate regulatory filing. "Fund III's strategy includes
targeting companies with one or more of the following
characteristics: sustainable cash flow, a proven management
team, strong relative position in its market, and/or a well
developed business strategy."
Fund III's investment period is scheduled to end on Dec. 15,
2014, according to the filing.
Oaktree Capital declined to comment.
Providers of mezzanine financing - subordinated debt, often
with an equity kicker - have been under pressure in the face of
competition from cheaper sources of loans. U.S. sponsors of
mezzanine limited partnerships raised an estimated $7.5 billion
in 2013, down from an estimated $8.9 billion in 2012, according
to Reuters Buyouts Magazine.
Among big fundraises, Crescent Capital Group closed Crescent
Mezzanine Partners VI last August with more than $3.4 billion in
Looking ahead, the mezzanine market may find more life were
interest rates to rise, making other sources of financing less