U.S. distressed debt giant Oaktree sets up wholly owned unit in Beijing

BEIJING/SHANGHAI, Feb 18 (Reuters) - U.S. distressed asset manager Oaktree Capital Management has set up a wholly owned unit in China seeking direct access to the country’s bad loan market.

The unit, Oaktree (Beijing) Investment Management Co, was set up with a registered capital of $5.42 million, Beijing’s financial regulatory department said in a statement on Monday.

As part of the Phase 1 trade deal between China and the U.S., China will allow U.S. firms to apply for asset management company licenses, and allow them to acquire non-performing loans directly from Chinese banks. Currently, foreign asset managers can only buy Chinese distressed assets through local bad loan companies.

Oaktree is the first foreign distressed debt manager to set up a wholly owned unit in China following the deal.

Based in Los Angeles and established in 1995, Oaktree has already invested a total $6.5 billion in China’s distressed debt market, the statement showed.

It invested in China through various joint ventures previously, including one with state-run asset management company China Cinda Asset Management. Oaktree already owns a unit in Shanghai that helps Chinese invest in overseas distressed assets.

Oaktree did not immediately respond to a Reuters request for comment. (Reporting by Cheng Leng, Samuel Shen and Ryan Woo; Editing by Shounak Dasgupta)