Oaktree Capital Group’s assets under management totaled $100.2 billion as of Sept. 30, down 3% from the end of the second quarter but up 8% from the end of the year-earlier quarter, said the alternative investment firm in its earnings report released Thursday.
Firm executives attributed the drop for the quarter to $3.7 billion in market value declines, $600 million in distributions to closed-end fund investors and $500 million in net outflows from open-end funds.
The year-over-year AUM increase was the result of $17.7 billion in new capital commitments and fee-generating leverage for closed-end funds, and $100 million in net inflows for open-end funds, executives said in the earnings report. Capital inflows and fee-generating leverage for closed-end funds included $9.9 billion for Oaktree Opportunities Fund X and Oaktree Opportunities Fund Xb, $1.6 billion for Oaktree Real Estate Opportunities Fund VII, $1.4 billion for collateralized loan obligation vehicles, $1.2 billion for enhanced income funds and $1.1 billion for Oaktree Power Opportunities Fund IV.
Other funds Oaktree is raising include Oaktree Infrastructure Fund, Oaktree European Capital Solutions Fund and Oaktree Principal Fund IV.
Management fees fell to $181.9 million for the quarter, down 6.5% from the year-earlier quarter, due primarily to $20.8 million decline in fees from closed-end funds in liquidation.
GAAP net income was $1.9 million for the quarter, compared with $19.8 million in the second quarter and $18.9 million in the year-earlier quarter.
Incentive income, which is based on profits, fell to $16.9 million, down 80.4% year-over-year from $86.3 million.
Investment income also fell to a loss of $20 million for the quarter, compared to a loss of $2.4 million for the third quarter of 2014. Lower overall fund returns amid weaker financial markets drove the decline for the quarter, Oaktree executives said.
“In the face of difficult market conditions during the quarter, Oaktree continued to deliver strong fundraising results. We raised $2.7 billion during the third quarter, bringing our past 12-month total to $22.6 billion and our balance of dry powder to a record tying $20.1 billion. As a result, we are well-positioned to capitalize on global investment opportunities and to grow our management fee revenues and fee-related earnings in the quarters ahead,” CEO Jay Wintrob said in the earnings report.
