Oaktree Capital Management has reported a marked slowdown in investor redemption requests from its flagship private credit strategy, becoming one of the first major managers to signal easing liquidity pressure in a sector that has faced significant outflows this year, according to a report by Bloomberg.
The firm’s Strategic Credit Fund recorded redemption requests equivalent to 4.5% of assets in the second quarter, below its 5% withdrawal limit, allowing it to fully meet investor demand. The improvement represents a sharp decline from earlier in the year, when redemption requests were significantly higher and liquidity constraints were more widespread across the industry.
The development comes after a turbulent period for private credit markets, where investor concerns over loan quality, valuation uncertainty and exposure to vulnerable corporate borrowers—particularly in parts of the software sector—have driven substantial capital withdrawals across major asset managers.
Industry-wide, private credit funds experienced tens of billions in redemption requests in recent quarters, prompting several large managers, including BlackRock Inc and Blackstone Inc, to impose limits on withdrawals to manage liquidity.
Oaktree attributed the stabilisation to a more selective investor base and improved confidence in underwriting discipline amid a shifting credit cycle. The firm has long positioned itself as a countercyclical investor focused on distressed and opportunistic credit strategies.
Performance indicators for the fund remain stable, with annualised returns of around 8.8% over the past three years and very low levels of non-accrual assets, suggesting limited deterioration in underlying credit quality despite broader market volatility.
The fund, which manages roughly $4.4bn in net assets, also reported maintaining significant liquidity buffers to support ongoing operations and investor redemptions if needed.
