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Oaktree Capital Group, LLC Announces Second Quarter 2012 Financial Results

Stocks in this article: OAK

During the second quarter, Oaktree launched fundraising for two new closed-end funds: Oaktree Real Estate Opportunities Fund VI, L.P. (“ROF VI”) and the Oaktree Enhanced Income Fund, L.P. (“EIF”). ROF VI has a committed capital target of $1.5 billion-plus, with a first close anticipated later this year. EIF will invest in senior loan assets on a leveraged basis and has a total fund size target of about $1.5 billion, including leverage. EIF’s first close will be held this month, with its investment period expected to start next month.

As announced on July 25, 2012, Oaktree also plans to launch a new Emerging Market Opportunities investment strategy focused on distressed and dislocated corporate and sovereign debt, led by recently hired portfolio manager Julio Herrera.

The table below presents unaudited: (a) fee-related earnings, distributable earnings, adjusted net income and economic net income, in each case for both the Operating Group and per Class A unit; and (b) assets under management and accrued incentives (fund level) data. Please refer to the Glossary for certain definitions.

                                       

As of or for the Three Months Ended June 30,

As of or for the Six Months Ended June 30,

  2012     2011   2012   2011
(in thousands, except per unit data

or as otherwise indicated)

Segment Results:
Fee-related earnings $ 82,213 $ 69,125 $ 162,490 $ 155,822
Fee-related earnings-OCG per Class A unit 0.41 0.30 0.82 0.70
Distributable earnings 176,355 170,280 313,684 329,727
Distributable earnings-OCG per Class A unit 1.02 0.91 1.73 1.71
Adjusted net income 165,510 141,022 339,142 348,376
Adjusted net income-OCG per Class A unit 0.89 0.69 1.79 1.83
Economic net income 103,637 97,983 382,028 495,562
Economic net income-OCG per Class A unit 0.60 0.43 1.94 2.76
 
Operating Metrics:
Assets under management (in millions):
Assets under management $ 78,713 $ 79,519 $ 78,713 $ 79,519
Management fee-generating assets under management 66,311 63,869 66,311 63,869
Incentive-creating assets under management 35,996 37,275 35,996 37,275
Uncalled capital commitments 13,737 12,661 13,737 12,661
Accrued incentives (fund level):
Incentives created (fund level) (9,116 ) 33,699 256,046 467,450

Incentives created (fund level), net of associated incentive income compensation expense

(589

)

20,941

158,846

275,426

Accrued incentives (fund level) 1,751,326 2,296,087 1,751,326 2,296,087

Accrued incentives (fund level), net of associated incentive income compensation expense

1,070,597

1,313,769

1,070,597

1,313,769

 

Note: Oaktree discloses in this earnings release certain financial measures, including fee-related earnings, fee-related earnings-OCG per Class A unit, distributable earnings, distributable earnings-OCG per Class A unit, adjusted net income, adjusted net income-OCG per Class A unit, economic net income and economic net income-OCG per Class A unit, that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States (“non-GAAP”). Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are presented in Exhibit A hereto. All information in this earnings release gives effect to the conversion of our previously outstanding 13,000 Class C units into Class A units on a one-for-one basis before the initial public offering of our Class A units.

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