OHA and OneIM Launch a Partnership to Invest in European Private Credit

Rhea-AI Summary

Oak Hill Advisors (OHA) and One Investment Management (OneIM) have launched a partnership to invest in European private credit. The venture has up to $5 billion of initial investable capital to address European borrowers' needs. This collaboration leverages OHA's longstanding European presence and global private credit expertise with OneIM's global network and flexibility.

OHA, investing in Europe since 1992, has made over $17 billion of investments in the region. OneIM, founded in 2022, has raised approximately $7 billion in commitments. The partnership aims to provide bespoke financing solutions to European companies and private equity sponsors, capitalizing on the growing demand for private credit in the region.

Positive

• Partnership has up to $5 billion of initial investable capital
• OHA has made over $17 billion of investments in Europe
• OneIM has raised approximately $7 billion in commitments
• Expanded market reach and combined expertise in European private credit
• Potential for higher long-term performance through diverse investment strategies

Negative

• None.

Financial Analyst

The partnership between Oak Hill Advisors (OHA) and One Investment Management (OneIM) to invest in European private credit is significant due to the substantial initial capital commitment of up to $5 billion. This move highlights a strategic push into a market that has been rapidly evolving, driven by the needs of high-quality European borrowers seeking flexible financing solutions.

From a financial perspective, this collaboration leverages the strengths of both firms, combining OHA's long-standing market presence and OneIM's global network and flexibility. Such a partnership is poised to offer attractive risk-adjusted returns by addressing a broader range of capital needs across diverse industries and geographies. Notably, OHA's track record in European markets, with over $17 billion already invested, provides a strong foundation for this venture.

Additionally, the ability to invest across the capital structure, including real estate, public and private equity and credit, positions the partnership well to capture opportunities across credit and equity market cycles. This versatility is important for resilience and long-term performance in fluctuating market conditions.

For investors, the creation of this partnership can be seen as a way to gain exposure to European private credit through two established players, potentially offering diversified and higher-yield investments compared to traditional credit markets.

Market Research Analyst

The European private credit market has been growing, driven by a shift from traditional bank lending to alternative sources of credit. This partnership between OHA and OneIM is well-timed, as it taps into the increasing demand for bespoke and flexible capital solutions from European borrowers, particularly in times of economic uncertainty and regulatory changes affecting traditional lenders.

Market dynamics currently favor private credit investments due to the competitive landscape of bank lending, which often leads to more stringent lending criteria. OHA and OneIM's combined sourcing and origination capabilities can leverage these market inefficiencies, providing tailored financing solutions that traditional banks may not offer.

The venture’s initial $5 billion commitment highlights the scale at which both firms are willing to operate, suggesting a level of confidence in the market’s growth potential and their ability to deploy capital effectively. This is supported by the firms' extensive experience and networks, which are critical for sourcing high-quality deal flow and mitigating risks associated with private credit investments.

For retail investors, understanding the shifts in the credit market landscape and the role of alternative lending solutions is important. This partnership could offer insights into the broader trend of institutional investors seeking higher returns and diversification through private credit.

New York, New York, July 16, 2024 (GLOBE NEWSWIRE) -- Oak Hill Advisors (“OHA”), a leading global credit-focused alternative asset manager, and One Investment Management (“OneIM”), a global alternative investment manager, today announce the formation of a partnership to invest in European private credit. The new venture has initially up to $5 billion of investable capital which will help address the needs of European borrowers. Both firms will benefit from the partnership’s size and scale, as well as the teams’ combined sourcing and origination capabilities.

“The European private credit market has been rapidly evolving, with high quality European borrowers increasingly seeking the benefits of private credit.” said Alexis Atteslis, Co-Head of Europe and Partner at OHA. “Our venture with OneIM will be a trusted, ‘go-to’ financing partner for companies and private equity sponsors, offering bespoke and flexible capital solutions.”

The partnership represents a landmark initiative for both firms and is a natural extension of both OHA’s European credit and global private credit businesses. OHA has been investing in Europe since 1992, establishing a dedicated European office in London in 2005, and has made over $17 billion of investments in the region.

Founded in 2022, OneIM is a global alternative investment management firm with offices in London, New York, Tokyo and Abu Dhabi, which has raised commitments of approximately $7 billion. The firm’s mandate creates flexibility to invest across the capital structure in a range of industries, geographies and asset classes including real estate, public and private equity and credit. OneIM efficiently targets fresh capital opportunities, capturing both credit and equity market cycles, creating resilience and the potential for higher long- term performance.

Ignacio Lopez-Garrastazu Torrens, Partner at OneIM, said: “OneIM’s deep global network, flexibility and expertise coupled with OHA’s longstanding market positioning will provide European borrowers with solutions that best address their companies’ needs right now.”

OHA entered the private markets in 2002 as one of the first non-bank lenders and has since made nearly $39 billion in private credit commitments across more than 300 portfolio companies, with approximately half in first lien loan and unitranche investments and the other half in second lien and junior opportunities.

Alan Schrager, Portfolio Manager and Senior Partner at OHA, said: “This strategic initiative with OneIM will allow us to leverage our global sponsor relationships and experience in leading large transactions, as well as our expertise in the European markets.”

Yanni Pipilis, Co-Founder of OneIM and Managing Partner said: “Partnering with OHA will leverage our combined expertise and resources. This will further enable us to deliver innovative financing solutions tailored to the unique needs of our borrowers and continue to drive the growth of European businesses.”

Glenn August, Founder and Chief Executive Officer of OHA, said: “We are excited to establish this strategic partnership with OneIM and advance OHA’s significant presence in the development of the European capital markets. Having invested across various regions, asset classes and market environments for more than 30 years, OHA has developed deep proficiency in sourcing and underwriting credit to drive attractive risk-adjusted returns for our global investor base. We look forward to combining our expertise with OneIM’s platform through a collaborative investment approach, offering attractive returns to investors of both institutions.”

Rajeev Misra, Co-Founder and Chief Executive Officer of OneIM, said: “This partnership marks an exciting development for OneIM. The two firms’ combined talent, experience and networks will allow us to unlock opportunities in the private credit market across Europe. This new venture will leverage the global presence and expertise of both institutions and build on OneIM’s proven track record of delivering optimal returns for global investors.”

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About OHA: Oak Hill Advisors (OHA) is a leading global credit-focused alternative asset manager with over 30 years of investment experience. OHA works with institutions and individuals and seeks to deliver a consistent track record of attractive risk-adjusted returns. The firm manages approximately $64 billion of capital across credit strategies, including private credit, high-yield bonds, leveraged loans, stressed and distressed debt and collateralized loan obligations as of March 31, 2024. OHA’s emphasis on long- term partnerships with companies, sponsors and other partners provides access to a proprietary opportunity set, allowing for customized credit solutions across market cycles.

With over 400 experienced professionals across six global offices, OHA brings a collaborative approach to offering investors a single platform to meet their diverse credit needs. OHA is the private markets platform of T. Rowe Price Group, Inc. (NASDAQ – GS: TROW). For more information, please visit oakhilladvisors.com.

About OneIM: OneIM is a global alternative investment manager that invests across the capital structure, in a range of asset classes, industries and geographies. The firm applies a flexible investment approach driven by fundamental analysis, focusing on credit special situations and capital dislocations. OneIM seeks to provide tailored capital solutions built on proprietary sourcing and underwriting complexity. OneIM is sector agnostic and targets complex situations that do not fit into a single asset class, where truly bespoke structured investments can offer superior risk-reward dynamics and asymmetrical outcomes. The firm was founded in 2022 and currently manages approximately $7 billion in assets. The team operates from offices in Abu Dhabi, London, Tokyo and New York.

FAQ

What is the purpose of the partnership between OHA and OneIM?

The partnership between Oak Hill Advisors (OHA) and One Investment Management (OneIM) aims to invest in European private credit, providing financing solutions to European borrowers and private equity sponsors.

How much initial investable capital does the OHA-OneIM partnership have?

The partnership between OHA and OneIM has up to $5 billion of initial investable capital to address the needs of European borrowers.

When did OHA start investing in Europe?

OHA has been investing in Europe since 1992 and established a dedicated European office in London in 2005.

How much has OHA invested in Europe to date?

OHA has made over $17 billion of investments in Europe since it began investing in the region in 1992.

When was OneIM founded and how much has it raised in commitments?

OneIM was founded in 2022 and has raised commitments of approximately $7 billion.