Oaktree Capital Management LP, a global asset management firm, has launched its private credit-focused Oaktree Lending Partners, which is targeting $10 billion in equity commitments from institutional investors.

OLP will seek to originate senior secured loans of $500 million or more to private equity-owned U.S. companies, typically with over $100 million in Ebitda. According to Oaktree, the market is attractive given the limited availability of debt capital to finance large leveraged buyouts (LBOs) and the high levels of committed private equity capital yet to be deployed, requiring financing.

 The need for this type of lending is significant, but we anticipate limited competition given the retreat of banks from this area and the dearth of nonbank lenders with the requisite scale, flexibility and credit expertise,” comments Howard Marks, co-chairman of Oaktree. “We feel this creates opportunities to lend at attractive rates for deals with strong covenants and low leverage ratios. Our approach to direct lending has always been grounded in the first tenet of Oaktree’s investment philosophy: the primacy of risk control. We believe this to be one of the most attractive opportunities we’ve ever seen in direct lending.”