Oak Hill’s “best ideas” fund spans the full credit spectrum

Please note, this interview was recorded Monday 27 October 2025

In an environment where investors are increasingly seeking diversification and reliable income, Oak Hill Advisors (OHA) has brought its multi-strategy credit expertise to Australian investors through the T. Rowe Price OHA Flexible Credit Income Fund AUD (OFLEX AUD). 

Backed by more than 30 years of experience and US$98 billion in assets under management, OHA has built a reputation as a leading player in the alternative credit market, spanning both private and liquid strategies.

As Adam Nankervis explains, the fund’s defining feature is its ability to draw on the full breadth of OHA’s global credit platform to build a diversified, opportunity-driven portfolio.

“We’re bringing to market what is essentially Oak Hill's best ideas fund. We’re trying to get assets to compete against each other across private and liquid credit to create a broad, constructive portfolio.”

OFLEX combines exposures across direct lending, junior capital, special situations, asset-backed lending, and more liquid markets such as syndicated loans, high-yield bonds, and structured credit. The result is a fund designed to deliver income and diversification, while remaining flexible enough to respond dynamically to evolving market conditions and economic cycles.

Learn more about the fund by watching the video above, or read a summary below. 

INTERVIEW SUMMARY

Global reach and institutional heritage

Oak Hill Advisors (OHA) has been managing sub-investment-grade credit for over three decades, amassing US$98 billion in assets under management. The firm services predominantly institutional and pension fund clients across developed markets, with a strong presence in the US and Europe. Its +130 investment professionals operate across the full spectrum of non-investment-grade credit - from private lending and stressed situations to liquid high-yield and structured credit.

“We’re focused across the broad lens that is alternative credit: private lending, stressed and distressed, and also liquid markets in high-yield bonds, loans, and structured products.”

A private equity lens on credit

OHA applies a disciplined underwriting process that borrows from private equity principles. Nankervis describes this as taking “a private equity-style lens to credit investing.” The approach begins with sector-level conviction, identifying industries where OHA has deep expertise, and structuring deals accordingly.

“If you can have a consistent coverage and a team that has a real lens of what they like within that sector, you can ultimately minimise defaults and harvest what is the credit premium,” he explains. 

This structure is supported by specialists in documentation, sourcing, and distressed opportunities, allowing the team to identify value across multiple segments of the credit spectrum.

The OFLEX opportunity set

The T. Rowe Price OHA Flexible Credit Income Fund AUD is designed as a “best ideas” portfolio that captures opportunities from OHA’s entire platform. The fund’s universe spans six primary areas: direct lending, junior capital solutions, special situations, asset-backed lending, CLO's/structured credit and liquid credit which includes both syndicated loans and high yield bonds.

“We’re trying to get assets to compete against each other to create a broad, constructive portfolio,” says Nankervis. 

“The goal is not to make market timing calls but to react to opportunities as they present.”

Direct lending remains a core component, often supported by significant equity cushions. Asset-backed markets are also expanding rapidly, particularly in data centres, telecommunications, transport, and aviation. Meanwhile, special situations provide tactical entry points as market dislocations arise.

Managing risk through discipline and consistency

While the fund’s opportunity set is broad, Nankervis stresses that risk management remains anchored in rigorous underwriting. 

“You can talk about credit spreads, you can talk about illiquidity premiums, but it means nothing unless you get your money back after writing that loan,” he says.

OHA’s process emphasises consistency, resilience, and awareness of evolving macro risks, including trade policy shifts, labour shortages, and the impact of AI on business models. “They’re not new risks, but they’re ones we need to be constantly vigilant about,” he adds.

Role in a diversified portfolio

For investors, OFLEX AUD is positioned as an income-generating, diversifying allocation within a broader credit portfolio. Nankervis notes that the fund targets large-cap borrowers with similar financial characteristics to companies in the ASX200, offering exposure to offshore credit markets that can complement domestic holdings.

“It’s an important income-generating fund,” he says. 

“To the extent investors are looking for diversification, this provides exposure to a two-and-a-half-trillion-dollar private credit market globally, with less correlation to construction and to Australian-specific risks.”