T. Rowe Price and Oak Hill Advisors (OHA) recently announced the launch of their joint investment offering, the T. Rowe Price OHA Select Private Credit Fund (OCREDIT). OCREDIT offers an OHA-managed private credit investment solution for income-oriented individual investors with the convenience of a non-traded and perpetual-life business development company (BDC) structure.
OCREDIT is launching with $1.5 billion of investible capital, making it one of the industry’s largest non-traded BDC launches. And this includes over $600 million raised in equity commitments from T. Rowe Price and a group of global institutional investors with long-term investment orientations along with $875 million in credit facility commitments. OCREDIT is going to build on this momentum by opening this perpetual offering to individual investors.
OCREDIT is seeking to generate attractive returns driven by generally high and stable current income through different market environments, including periods of market volatility. And the fund invests in a diversified portfolio of primarily senior secured, privately originated loans to larger, well-established and recession-resistant companies located predominately in North America. OCREDIT harnesses the differentiated capabilities of OHA’s $61 billion credit specialist platform developed and proven over its 30-year history.
OCREDIT is seeking to capitalize on significant continued growth of the market for private credit, which is projected to expand from $1.5 trillion at the end of 2022 to $2.3 trillion by the end of 2027 according to data from Preqin.
T. Rowe Price acquired Oak Hill Advisors, L.P., in December 2021 to accelerate its expansion into alternative markets – complementing its existing global platform and ongoing strategic investments in its core capabilities. And OCREDIT combines OHA’s institutional-quality investment strategy with T. Rowe Price’s differentiated investor experience and world-class client service.
KEY QUOTES:
“From the beginning of our partnership with OHA, we have shared a vision to build a broader business in private markets by combining their expertise in private credit with T. Rowe Price’s global scale. OCREDIT offers just that, bringing the benefits of private credit – historically available only to institutional investors – to individual investors and their advisors.”
– Rob Sharps, chief executive officer and president of T. Rowe Price
“Consistent with OHA’s history, OCREDIT focuses on market-leading companies that we believe offer better credit profiles with experienced management teams, diverse sources of revenue and the potential to weather challenging market conditions. We are a ‘go-to’ financing partner for companies and their private equity sponsors, which enhances sourcing and our ability to lead and structure transactions with pricing and terms that reward our investors.”
– Eric Muller, portfolio manager and partner at OHA and OCREDIT chief executive officer
“We expect the substantial growth in demand for private financing solutions to continue to drive an attractive investment opportunity for OCREDIT. We believe that directly originated loans at the top of the capital structure offer the most attractive absolute and relative value in corporate credit currently. Our highly selective approach and deep expertise as a leading credit specialist over decades also position us to manage downside risk across market cycles.”
– Alan Schrager, senior partner and portfolio manager at OHA and chairman of OCREDIT
