Oaktree Capital Management has elected to meet 100% of redemption requests in its Oaktree Strategic Credit Fund (OSC) for the first quarter, as liquidity pressures continue to test investor confidence across private credit markets, according to a report by Reuters.
The fund received redemption requests equivalent to 8.5% of shares and will repurchase approximately 6.8% of outstanding shares, with parent company Brookfield Asset Management reportedly acquiring a further 1.7% to fulfil total demand.
The move contrasts with several peers that have enforced standard quarterly redemption limits of 5% amid a broader uptick in withdrawal requests. Funds managed by firms including Morgan Stanley, Apollo and Ares have seen redemption levels exceed 10%, opting to gate outflows in order to preserve liquidity.
Non-traded business development companies such as OSC typically provide quarterly liquidity through capped tender offers. However, rising scrutiny of the private credit market has driven increased redemption activity. Industry data shows such vehicles returned a record $5.8bn to investors in the first quarter.
Oaktree said current market conditions reflect a “correction rather than a crisis”, pointing to a repricing already underway across software and broader credit markets following a period of rapid growth. The manager also highlighted increasing dispersion across the asset class as conditions normalise.
Alongside meeting redemptions, the $7.3bn fund has reduced its monthly dividend to $0.16 per share from $0.18, citing lower rates and tighter credit spreads. The strategy, launched in 2022, focuses on privately negotiated loans to US companies.
