A private credit fund owned by Oaktree Capital Management OAK-N has decided to honor the entirety of 8.5 per cent in redemption requests it received in the first quarter, according to a regulatory filing on Friday, as retail investors bolt for the doors.
The asset manager is repurchasing roughly 13.9 million, or 6.8 per cent, of the outstanding shares from investors in the Oaktree Strategic Credit Fund.
Separately, Oaktree’s parent Brookfield BN-T is purchasing another 1.7 per cent of shares to help the asset manager meet 100 per cent of the redemption requests this quarter.
The spike in redemptions comes as a wave of negative headlines around private credit in recent months has drawn intense scrutiny to the roughly US$2-trillion industry.
Ares caps withdrawals at private credit fund after redemption requests surge
Some asset managers have capped redemptions at the usual 5-per-cent quarterly limit, but others, such as Blackstone BX-N, have decided to honor 100 per cent of redemptions in the first quarter.
Non-traded business development companies, like Oaktree Strategic Credit Fund, typically offer quarterly liquidity to investors through tender offers of up to 5 per cent of shares.
Top asset management executives have said the industry could have done a better job on educating investors about the liquidity profile of non-traded BDCs.
The Oaktree fund had US$1.8-billion of available liquidity from cash and undrawn credit facilities, as of March 23.