Oaktree Hires Former Barclays Banker Connor for InfrastructureBy and
Connor to focus on transportation alongside Emmett McCann
Investors have asked Oaktree for specialization: CEO Wintrob
Oaktree Capital Group LLC hired Josh Connor, a former banker at Barclays Plc and Morgan Stanley, to co-manage its U.S. transportation portfolio as the firm specializes its approach to infrastructure.
Connor joined Oaktree this week as a managing director and co-portfolio manager of transportation infrastructure investing, according to Ian Schapiro, the head of Oaktree’s infrastructure strategy. Connor will manage the portfolio with Emmett McCann, Schapiro said in a telephone interview.
Oaktree’s infrastructure coverage, bolstered by the acquisition of Highstar Capital in 2014, has two main areas of focus: transportation, and energy and power. The Los Angeles-based firm is building out its transportation expertise to take advantage of the vast need for improvements in the U.S., growing demand for public-private partnerships, and specialized knowledge requirement, Schapiro said.
“It’s very hard to build a long-term, successful track record without having some kind of knowledge advantage,” he said. “Transportation is very much a fragmented market that we think requires a grassroots, hands-on approach to deal origination. Having real specialization is very, very important.”
Clients are also asking for it. Some of the large investors evaluating Oaktree’s new infrastructure fund, which it’s in the process of raising, “have shown an interest in some greater sector specialization, particularly in transportation,” Jay Wintrob, Oaktree’s chief executive officer, said on a call with analysts in February.
The firm at the time was exploring the possibility of a separate vehicle for transportation, Wintrob said. The infrastructure fund had commitments amounting to $409 million as of Dec. 31, according to Oaktree’s fourth-quarter earnings statement.
Schapiro declined to comment on fundraising.
During and after the firm’s integration of Highstar, some senior executives, including Chris Lee, Michael Miller and Chris Beall, stepped back from daily responsibilities, people with knowledge of the matter said. Beall left, and Lee and Miller shifted into advisory roles, said the people, who asked not to be identified because the moves weren’t announced.
Highstar’s latest fund, a $2 billion pool that invested from 2010 to 2016, was generating an 8.8 percent annualized return after fees as of Dec. 31.
Connor joins Oaktree from a transportation-focused investment partnership he founded after leaving Barclays in 2015. He also became an adviser to Oaktree that year, and he’s invested alongside the firm in several deals, including the proposal to operate New York’s Westchester County Airport.
Connor and McCann are reuniting after working together at Morgan Stanley, where Connor co-led global transportation and infrastructure banking and McCann ran the European infrastructure team. Connor later joined Barclays, leading transportation banking globally before co-heading the industrials banking group.
Oaktree is led by Wintrob and co-Chairmen Howard Marks and Bruce Karsh. Marks and Karsh started the firm with other partners in 1995 and have expanded it to oversee $101 billion in distressed debt, private equity holdings, real estate, infrastructure and energy-related assets as of Dec. 31.