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Oaktree Capital Group, LLC (NYSE:OAK) today reported its unaudited financial results for the quarter ended September 30, 2012.
For the third quarter of 2012, adjusted net income (“ANI”) was $157.7 million on segment revenues of $304.6 million, as compared with ANI of $3.3 million on segment revenues of $121.2 million for the third quarter of 2011, when financial markets fell sharply. Management fees, incentive income and investment income each rose as compared with the year-earlier quarter. Management fees produced fee-related earnings of $73.0 million, which together with net incentive income and receipts of investment income generated the quarter’s distributable earnings of $120.4 million and distribution of $0.55 per Class A unit.
Howard Marks, Chairman, said, “The third quarter demonstrated again Oaktree’s ability to deliver strong financial results that generate cash for our unitholders. Building on the investment success that underlies these results, as well as our expertise in credit, we’re focused on exciting opportunities ahead in real estate, emerging markets, corporate credit and distressed debt.”
In addition to ANI, Oaktree calculates economic net income (“ENI”) to facilitate comparability with other alternative asset managers that use ENI as their profit measure. Unlike ANI, ENI measures incentive income based on current market values, not realizations. ENI for the third quarter of 2012 was $368.0 million, including incentives created (fund level), net of compensation expense, of $247.0 million.
GAAP-basis results for the quarter ended September 30, 2012 included net income attributable to Oaktree Capital Group, LLC of $25.2 million.
During the third quarter, Oaktree held first closings for two new closed-end funds: Oaktree Real Estate Opportunities Fund VI, L.P. (“ROF VI”) and Oaktree Enhanced Income Fund, L.P. (“EIF”). ROF VI has committed capital today of $255 million, which is expected to grow to at least $1.5 billion by the time fund raising is completed next year. To date, Oaktree has raised over $500 million of equity and debt for EIF, which invests in senior loan assets on a leveraged basis. EIF is expected to reach a total fund size of approximately $1.5 billion, including leverage, over the next few months. Investment periods for both funds commenced in September 2012.