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Oaktree Capital Management, L.P on Monday announced that it has entered into a definitive agreement to acquire the Highstar Capital team, a leading infrastructure investment manager. Financial terms were not disclosed.
Highstars infrastructure investment strategy is complementary to Oaktrees successful Power Opportunities strategy, led by Ian Schapiro, who will oversee the Highstar team and be responsible for its integration into Oaktree. Since 1995, the Oaktree Power Opportunities team has invested in companies that provide products and services that support energy and utility infrastructure. Highstar invests in the physical infrastructure itself.
Oaktree Capital said they believe that the aging nature of global infrastructure and the move toward public-private partnerships are creating opportunities for experienced and knowledgeable investors to source investments that will benefit the infrastructure system.
Highstar is a pioneer in infrastructure investing, and a leader in U.S. energy infrastructure, waste management and transportation public-private partnerships - a skill set that is highly complementary to Oaktrees Power Opportunities strategy, said John Frank, Managing Principal of Oaktree. Furthermore, Highstars long-term, value-oriented and risk-controlled investment approach is fully consistent with the Oaktree investment philosophy.
Ian Schapiro, Managing Director and Portfolio Manager at Oaktree Capital Management, said:
"We are proud of our long track record of investing in successful companies that support North American energy infrastructure. We believe the time is right to capitalize on our extensive experience in this market and our access to proprietary deal flow by investing directly in infrastructure opportunities. We have been looking for an experienced and capable investment team that shares our investment approach, is able to help source attractive investment opportunities, and is capable of adding value to these investments once made. We believe Highstar is such a team."
Highstar Founder and Managing Partner, Christopher H. Lee, said:
"We couldn't have hoped for a better new home for our team. Oaktree brings global resources, an enviable investment track record, and a highly complementary set of investment skills and capabilities. We are very excited to become a part of the Oaktree family, and believe that together we will be able to continue to provide our investors with a first-rate infrastructure investing platform."
The transaction, which is subject to customary regulatory and other approvals, is expected to close in the third quarter of 2014, at which time Oaktree will become the manager of Highstar Fund IV with $2.3 billion of assets under management as of December 31, 2013.
Oaktree is a leader among global investment managers specializing in alternative investments, with $86.2 billion in assets under management as of March 31, 2014. Since its inception in 1995, Oaktrees Power Opportunities strategy has focused exclusively on providing capital to leading companies that provide equipment, services, software and infrastructure used in the electric power and natural gas industries. Headquartered in Los Angeles, Oaktree has over 800 employees and offices in 16 cities worldwide.