Oaktree Capital Management is launching its latest commercial real estate debt fund, seeking to raise capital at a time in which ample liquidity is needed to help fill financing gaps caused in part by a pullback of national and regional banks.
The Los Angeles-based investment manager outlined plans for Oaktree Real Estate Debt Fund IV in a May 16 Form D filing and intends to raise $3 billion for the strategy, according to data from PERE.
Oaktree declined to comment on the fundraising, including confirming reports about the fund’s target.
Commercial real estate debt has been a top focus for the manager in recent quarters. The retreat of national and regional banks from commercial real estate financing opportunities has also opened more doors to alternative lenders and debt fund managers, especially as a $900 billion wave of maturing loans approaches this year and next per MSCI data.
Oaktree doubled down on its joint venture with Los Angeles-based bridge loan specialist iBorrow in January to target $800 million to $1 billion of new originations during 2023.
The duo closed on $612 million of non-recourse senior debt through their partnership in 2022. The JV’s loans typically carry terms between one to three years with loan size averaging about $15 million per financing with capacity to go up to $100 million.
The launch of Oaktree Real Estate Debt Fund IV arrived more than a year after the Brookfield Asset Management-owned firm closed on the $3 billion fundraise for Oaktree Real Estate Debt Fund III.
Data from PERE shows the prior strategy drew institutional commitments stateside and abroad, including $250 million from Tennessee Consolidated Retirement System, $200 million from the Minnesota Board of Retirement and $100 million from Teachers’ Retirement System of the State of Illinois.
Oaktree ranked 13 PERE’s Real Estate Debt 50 2023 table, with $6.17 billion of capital raised for real estate debt opportunities in the past five years.
Beyond iBorrow, Oaktree also partnered with Veleta Capital in 2022 to form a joint lending platform named Veleta Capital Partners. The venture was designed to supply 12-to-36-month senior secured transitional loans and commercial real estate assets up to $20 million.
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