The joint venture is designed to open the market for private capital to private client investors.
OppenheimerFunds and The Carlyle Group have formed a new joint venture to offer high net worth investors and advisors private credit opportunities. The investments will be mainly focused on the US market, the firms said yesterday.
The JV starts operating in 2018. It is designed to combine Carlyle’s global credit expertise with OppenheimerFunds’ product structuring and distribution capabilities to build an alternative credit platform for HNW clients and advisors.
The move is a way of widening access to private capital markets to non-institutional investors.
The trend of investing in private capital (equity, debt and real estate) has been something of a trend among institutions such as family offices, private banks and other wealth advisors for some time, because of the perceived superior yields available against a background of expensive listed equities and ultra-low interest rates. There have been some concerns that if significant fresh money comes in, this could compress yields and encourage investors to move higher up the risk spectrum eventually.
The venture will be led by co-heads Kamal Bhatia, head of investment solutions for OppenheimerFunds, and Mark Jenkins, head of global credit for The Carlyle Group. Initially, the venture will include allocation and underwriting across investments in opportunistic credit, direct lending, distressed transactions and structured credit assets in the US, Europe and Asia.
OppenheimerFunds oversees more than $243 billion in assets for over 13 million shareholder accounts, including sub-accounts, as of September 30, 2017. As for Carlyle, at the end of June this year it oversaw a total of $170 billion of assets under management across 299 investment vehicles.