Oaktree Capital Management has closed its €1.2bn private debt fund Oaktree European Capital Solutions Fund (ECS) III, backed by an institutional investor base including sovereign wealth funds and insurance groups.

The fund provides debt financing primarily to performing non-sponsor middle-market borrowers. ECS III is diversified across Western European countries and sectors, including real estate, infrastructure, and other hard asset-backed loans.

Nael Khatoun, managing director and portfolio manager of Oaktree’s European private debt strategy, said: ”As traditional European capital providers retreat from certain areas of the market, there is a compelling opportunity for capable private lenders to provide much-needed capital backed by strong assets.

”This fund aims to deliver attractive returns while investing in a risk-controlled manner that ensures capital preservation by providing financing to high-quality non-sponsor borrowers who may not be able to access banks or public capital markets, due to reduced bank appetite for mid-market transactions. As markets continue to navigate ongoing volatility, we’re confident that our resources and expertise will position us as a capital provider of choice and enable us to offer differentiated solutions to drive value for all stakeholders.”

ECS III had drawn 36% of committed capital and invested almost €609m across 24 loans as of March 2023.

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