Armen Panossian (Co-CEO of 160B fund Oaktree Capital, now a subsidiary of Brookfield) discusses his new role, transaction volume, and partnerships in the private lending universe, particularly in real estate and corporate lending.
He mentions liquidity in the market is significantly lower, with less trading volume and new issuance in high-yield bonds and senior loans. This is due in part to the lack of willing borrowers and sellers at current depressed valuations. Rising rates, inflation, and tougher regulation are expected for US banks, which creates opportunities for non-regulated entities like Oaktree to step in and partner with banks or lend directly to borrowers.
Oaktree’s recent life science lending fund raised $2.3 billion. They highlight the attractiveness of the life sciences industry for lending, citing specialized knowledge, more attractive terms, and lower loan-to-values compared to other asset classes. Specialized lending provides diversification benefits to investors and makes alternative solutions like Oaktree’s offerings more attractive to companies and operators. They note a meaningful increase in their deal pipeline as a result.