Oaktree Backs Gulf Real Estate Fund Arzan in Private Credit Push - Bloomberg

Oaktree Backs Gulf Real Estate Fund Arzan in Private Credit Push - Bloomberg

Oaktree Capital Management is backing a Middle East hospitality investor as private credit interest in the region is gaining traction.

The $209 billion alternative asset manager provided a debt financing commitment to Arzan Investment Management, which focuses on real estate, hospitality, and credit strategies in the Gulf, according to a statement. No financial details were disclosed.

The funding will give AIM the firepower to go out and acquire hospitality assets across cities in the Gulf, including Dubai. AIM, which has already done two hospitality deals in the city valued at about $400 million, has identified $1 billion of additional opportunities across the region.

Dubai, both its real estate and hotel market, has been drawing institutional capital as the emirate further cements its status as a popular tourism and wealth destination.

While asset managers have long turned to the Middle East as a place where they could hoover up more commitments for their funds, a growing number of players are now looking to the region as a place to deploy their private credit funds.

The Oaktree deal marks “an important step in the institutionalization of the region’s market” and underlines the “attractiveness of the GCC’s hospitality sector to global capital,” said AIM’s chairman Talal Al Bahar.

Saudi Arabia’s Public Investment Fund, for instance, recently agreed to anchor a series of new funds brought by Goldman Sachs Group Inc.’s asset management unit that will focus on private credit and public equity strategies across all six states of the Gulf Cooperation Council.

It’s not the first time Oaktree has sought to capitalize on the growing need for private credit in the region. 17Capital, which is majority owned by the asset manager, announced last year it would expand into Dubai.