Soreide Law Group is investigating potential investor claims involving recommendations of Oaktree Strategic Credit Fund (“OSC”), a $7.3 billion non-traded business development company (“BDC”) sponsored by Oaktree Capital Management and affiliated with Brookfield Asset Management that has recently faced heightened redemption demands, reduced distributions, declining share values, and broader scrutiny surrounding private credit investments.
OSC was offered as an income-focused private credit investment that primarily invests in privately negotiated loans to U.S. companies, including below-investment-grade debt, while also using leverage and limited liquidity structures that may not have been fully understood by some retail investors. Investors should be aware of significant recent developments involving redemption pressure, valuation concerns, liquidity limitations, and risks tied to private credit and software-sector lending.
Oaktree Strategic Credit Fund is a perpetually offered, non-listed BDC launched in 2022 that primarily invests in privately negotiated loans to middle-market U.S. companies. The fund also invests in publicly traded debt securities to provide liquidity and flexibility during market stress. Unlike publicly traded investments, OSC shares are not listed on an exchange, meaning investors generally cannot freely sell their shares and instead rely on limited quarterly repurchase offers.
The fund uses leverage to enhance returns and invests in speculative, below-investment-grade debt securities. Fund disclosures warn that investors may not have access to invested funds for extended periods, that repurchases are subject to significant restrictions, and that distributions may be funded from borrowings, offering proceeds, asset sales, or return of capital rather than cash flow from operations.
Recent reports stated that OSC received redemption requests equal to approximately 8.5% of outstanding shares during the first quarter of 2026, exceeding the standard 5% quarterly repurchase limit commonly used by non-traded BDCs. Oaktree reportedly repurchased approximately 6.8% of shares, while Brookfield purchased an additional 1.7% to help meet investor withdrawal requests. The fund also reduced its monthly distribution from $0.18 to $0.16 per share because of lower rates and tighter credit spreads.
Reports further indicated that the estimated value of the investment declined from its original $25 offering price to approximately $22.64 per share earlier in 2026. Fitch Ratings separately warned that non-traded BDCs are experiencing accelerating redemption pressure that could strain liquidity and leverage metrics if sustained. Industry commentary also raised concerns regarding private credit exposure to software-sector lending, valuation uncertainty involving illiquid loans, and the risk that investors may not be able to redeem shares during periods of stress.
Financial advisors recommending Oaktree Strategic Credit Fund may have been required to fully explain the investment’s illiquidity, leverage, redemption restrictions, speculative private debt exposure, valuation risks, and the possibility of declining distributions and share prices. Investors seeking conservative income or liquidity may not have understood that OSC invested in risky private loans, including software-sector credit exposure that became subject to increased scrutiny during 2025 and 2026.
Some investors also may not have been informed that redemption requests could be limited during periods of elevated withdrawals or that distributions could be supported through borrowings or return of capital instead of investment income. Recommendations of leveraged, non-traded private credit BDCs to retirees or income-focused investors with liquidity needs may raise suitability concerns depending on the investor’s objectives, risk tolerance, and financial circumstances.
Are you concerned about investments you made in Oaktree Strategic Credit Fund because of your financial advisor or securities broker? If so, reach out to Soreide Law Group at (888) 760-6552 or online and consult with a securities attorney regarding a possible recovery of your investment losses. Soreide Law Group has recovered losses for individuals throughout the US. Also, our securities lawyers handle cases on a contingency fee arrangement and advance all costs.
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