Bill Sacher, managing director and head of Oaktree Capital Group's mezzanine business, has left the world's biggest distressed debt firm because of disagreements over the future of its lending strategies.
Mr. Sacher, who ran the firm's mezzanine funds for 13 years, departed as Oaktree gathers capital for the strategy's fourth fund, according to a letter sent to clients this month from Chairman Howard Marks, President Bruce Karsh and John Frank, managing principal. Mr. Sacher will be replaced by managing directors Raj Makam and Bill Casperson, according to the letter, a copy of which was obtained by Bloomberg News.
The departure was “the result of our differing views as to how to develop an integrated mezzanine and private debt business that will best position us going forward,” the executives wrote. “While we have respect for Bill and wish him well, we're confident that both the (mezzanine) effort and our plans to expand in direct lending are on a sound path.”
Mezzanine financing is a small part of Oaktree's business, with the group raising $3.6 billion for three funds since 2001, according to the firm's first-quarter earnings statement.
Mr. Sacher is listed as a so-called key man on the third mezzanine fund, and Oaktree is asking the pool's investors for approval to amend the provision with Messrs. Makam's and Casperson's names to continue investing, according to two people with knowledge of the matter. The fund was about 83% invested as of March 31.
Oaktree oversaw $91.1 billion in assets as of June 30.
Mr. Sacher, reached by telephone, declined to comment. Alyssa Linn, a spokeswoman for Oaktree, declined to comment.