Lehman Brothers Loan Opportunity Fund (LBLOF) was formed to take advantage of a dislocation in the leveraged loan marketplace as a result of supply-and-demand imbalances. LBLOF makes investments primarily in well-secured leveraged first-lien bank loans through both the primary and secondary markets.

The investment team targets investment opportunities where the first-lien bank debt is supported by robust coverage of senior secured interest expense and significant capital junior to the secured bank debt. In addition, the investment team seeks recession-resilient businesses that have attractive debt repayment profiles, strong historical track records and proven management teams.

LBLOF employs leverage to its investments in a targeted amount that is 350% of the total capital commitments. The fund closed successfully in October 2007 with approximately $3.0 billion inclusive of its targeted leverage.