Oaktree Capital Management LP has partnered with Pantheon Ventures Ltd to scale its European direct lending strategy, with the joint platform targeting up to €1bn ($1.2bn) in assets as demand for private credit continues to deepen across the region, according to a report by Bloomberg.
The collaboration will see Pantheon provide additional capital alongside Oaktree’s existing portfolio of seeded investments, supporting a strategy focused on senior secured, first-lien loans to corporates across Europe and the UK. The structure is designed to expand origination capacity while maintaining a disciplined focus on lower-risk segments of the private credit market.
The initiative reflects Oaktree’s broader effort to increase its footprint in European lending markets, where traditional bank lending remains more dominant than in the US, leaving what the firm describes as a relatively under-penetrated opportunity set. The strategy is expected to target UK-domiciled borrowers in addition to continental European companies, broadening its geographic reach within developed credit markets.
Founded in 1995 by Oaktree Capital Management co-chairman Howard Marks, the firm has grown into a major alternative investment manager with approximately $223 billion in assets under management. Its credit platform has historically been known for distressed debt investing, though it has increasingly shifted toward performing credit strategies as private lending markets have expanded.
The partnership with Pantheon forms part of a wider trend among alternative asset managers seeking to scale European private credit exposure through co-investment structures and capital-raising alliances. Market participants note that the region’s relative reliance on bank lending has created structural demand for non-bank financing solutions, particularly for mid-sized corporates seeking flexible capital.
Executives at Oaktree have highlighted Europe as a key growth region, citing attractive yield differentials versus comparable US credit markets, even as spreads have gradually narrowed in recent periods. The firm has argued that geopolitical uncertainty and volatility have had limited impact on the resilience of higher-quality corporate credit, reinforcing the appeal of senior secured lending strategies.
The new vehicle is expected to focus on conservative underwriting standards, with emphasis on first-lien positions intended to enhance downside protection in the event of credit stress, consistent with Oaktree’s broader risk-adjusted return approach.
