Oaktree Capital Management's $7.3 billion Strategic Credit Fund honored all 8.5% of investor withdrawal requests in the first quarter of 2026, a move that contrasts with some peers in the private credit industry. The fund repurchased roughly 6.8% of its outstanding shares, approximately 13.9 million shares, to facilitate these redemptions. To further support the full payout, Oaktree's parent company, Brookfield, acquired an additional 1.7% stake from a single investor, contributing roughly $80 million.
This decision by Oaktree to meet 100% of redemption demands, which significantly exceeded the typical 5% quarterly limit for non-traded business development companies (BDCs) like itself, positions it alongside firms like Blackstone and Blue Owl Capital that have also chosen to satisfy full redemption requests. In contrast, other major players in the private credit space, including BlackRock's HPS, Apollo Global Management, and Ares Management, enforced their 5% quarterly redemption caps due to rising withdrawal pressures. For instance, redemption requests at Morgan Stanley's North Haven Private Income Fund, Apollo Debt Solutions BDC, and Ares Strategic Income Fund each surpassed 10% of shares in the first quarter, leading them to apply the 5% cap.
The Oaktree Strategic Credit Fund, launched in 2022, primarily invests in privately negotiated loans to U.S. companies. To facilitate redemptions and increase its available cash for future opportunities, the fund sold portions of its publicly traded loan and bond holdings and reduced its software concentration. As of March 23, it held $1.8 billion in available liquidity from cash and undrawn credit facilities. In conjunction with these liquidity measures, Oaktree also adjusted the fund's dividend, reducing it by 2 cents from 18 cents to 16 cents per share, which implies an 8.5% annualized net distribution rate. The firm characterized the current market environment as an "adjustment, not a crisis," maintaining a relatively conservative investment approach by limiting exposure to areas such as PIK and recurring revenue loans.
