Owl Rock Launches New Middle-Market Direct Lending Fund With UC Regents

Jun 30 2017 | 12:27am ET

Alternative asset manager Owl Rock has teamed with the Regents of the University of California to form a new strategic loan fund as part of the company’s middle-market direct lending efforts. 

The two firms have each ponied up an initial $100 million in equity for the new vehicle, according to a Reuters article citing a regulatory filing. It is structured as a 50/50 joint venture between the company's BDC Owl Rock Capital Corp., and the Regents, and will invest primarily in senior secured loans made to middle market companies.

Private credit activity in the middle-market space has boomed in recent years as investors have flocked to the relatively high risk-adjusted yields possible from the segment in return for little or no liquidity. 

Owl Rock was founded by senior KKR energy and infrastructure executive Marc Lipschultz, former GSO Capital Partners founder Douglas Ostrover, and ex-Goldman Sachs co-head of leveraged finance Craig Packer in 2016. The firm manages more than $3 billion in assets. 

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