Oaktree Plans CLO Equity Tranches Fund Targeting 15% Returns (1)

Oaktree Capital Management, one of the world’s largest opportunistic debt firms, is planning to raise €200 million ($213 million) to invest in equity tranches of collateralized loan obligations.

The fund is looking to deliver net returns of around 15% by offering CLO equity to warehouse facilities backed by European senior loans, according to a marketing document seen by Bloomberg News.

Such investments can generate higher returns for providing a backstop for a CLO warehouse — credit line facilities given by a bank — and is first to take a hit on losses.

Oaktree said it will capitalize on market ...