MMAA commits $40 mn to Oaktree Capital’s special situations fund

The Military Mutual Aid Association (MMAA) has committed $40 million to Oaktree Capital Management’s Asia-focused special situations fund which reportedly targets $2 billion in fundraising.

For its sixth Asia special situations fund, Los Angeles-based Oaktree is aiming to raise $100 million to $200 million from South Korea, according to South Korean news outlet MoneyToday on June 26.

In addition to MMAA, LINA Life Insurance Co., a South Korean unit of the US insurer Cigna, has committed $30 million to the latest fund with KB Insurance Co. Ltd. considering committing an undisclosed amount as a limited partner, the report added.

An MMAA source confirmed the report, but LINA Life and KB Insurance were not immediately reached for comment.

Special situations funds invest in stressed and distressed debt situations through the purchase of debts or equities issued by companies in distressed situations.

They are seen as a niche credit strategy for decent returns in comparison to syndicated and direct lending for which intense competition eroded returns.

In Asia, the Carlyle Group is exploring distress and special situations opportunities in China and India, its global credit head Mark Jenkins told the Korean Investors in February.

Earlier this week, CVC Credit Partners announced the final close of its second global special situations fund at $1.42 billion, exceeding its fundraising target of $1.0 billion.

hiuneal@hankyung.com