Oaktree Strategic Credit Fund Hits $6.9B Portfolio, Brookfield to Take Full Control

TL;DR

**Oaktree Strategic Credit Fund is a stable income play with a solid portfolio, but Brookfield's full takeover of Oaktree means a new era of potential synergies and strategic shifts is on the horizon.**

AI Summary

Oaktree Strategic Credit Fund (OSCF) reported a fair value of its investment portfolio at $6,899.0 million as of September 30, 2025, primarily comprising senior secured debt investments at 93.3%. The weighted average annual yield of its debt investments was approximately 9.5%. The company, structured as a non-diversified, closed-end management investment company, operates as a Business Development Company (BDC) and intends to qualify as a Regulated Investment Company (RIC). OSCF successfully raised $3,460.1 million from Class I shares, $1,309.9 million from Class S shares, $4.0 million from Class D shares, and $1.2 million from Class T shares, totaling $4,775.2 million in aggregate purchase price for shares issued and sold as of September 30, 2025. The company maintains an asset coverage ratio of 281.92% with $2,499.4 million in senior securities outstanding, well above the 150% BDC requirement. A significant strategic development is Brookfield's agreement to acquire the remaining 26% interest in Oaktree, expected to close in Q1 2026, giving Brookfield 100% ownership and control over Oaktree's board. OSCF's investment strategy focuses on generating stable current income and long-term capital appreciation by investing primarily in private debt opportunities, targeting medium-sized companies with EBITDA between $25 million and $150 million.

Why It Matters

Oaktree Strategic Credit Fund's robust $6.9 billion portfolio, heavily weighted towards senior secured debt, signals stability and consistent income generation for investors, especially with a 9.5% weighted average yield. The impending 100% acquisition of Oaktree by Brookfield in Q1 2026 could significantly alter the competitive landscape in alternative investments, potentially enhancing Oaktree's access to capital and deal flow through Brookfield's vast network. This consolidation could also impact employees through integration efforts and customers through potential changes in investment strategy or product offerings. For the broader market, it underscores the ongoing trend of large financial institutions acquiring specialized alternative asset managers to expand their private credit capabilities.

Risk Assessment

Risk Level: medium — The risk level is medium due to the inherent illiquidity of private debt investments and the concentration in medium-sized companies, which can be more susceptible to economic downturns. While the asset coverage ratio of 281.92% is strong, the company's reliance on leverage for financing investments introduces interest rate risk. The upcoming 100% acquisition of Oaktree by Brookfield, while potentially beneficial, also introduces integration risks and potential shifts in investment philosophy or operational control.

Analyst Insight

Investors should monitor the integration of Oaktree into Brookfield post-Q1 2026 to assess any changes in investment strategy or risk appetite. Given the stable income generation from its senior secured debt portfolio and attractive yield, OSCF could be a suitable option for income-focused investors, but they should be aware of the illiquidity and private market risks.

Financial Highlights

revenue

$6.9B

total Assets

$6.9B

total Debt

$2.5B

Key Numbers

• $6.9B — Fair Value of Investment Portfolio (As of September 30, 2025, indicating significant asset base.)
• 93.3% — Portfolio in Senior Secured Debt (Highlights a conservative, income-focused investment strategy.)
• 9.5% — Weighted Average Annual Yield (Attractive yield on debt investments as of September 30, 2025.)
• $4.8B — Aggregate Purchase Price of Shares Sold (Total capital raised from share classes as of September 30, 2025.)
• 281.92% — Asset Coverage Ratio (Well above the 150% BDC requirement, indicating strong financial health.)
• 158 — Portfolio Companies (Diversification across a substantial number of investments.)
• 26% — Remaining Oaktree Interest to be Acquired by Brookfield (Signifies Brookfield's move to 100% ownership of Oaktree.)
• Q1 2026 — Expected Closing of Brookfield Acquisition (Key date for full ownership transfer and potential strategic shifts.)
• $25M-$150M — Target EBITDA for Medium-Sized Companies (Defines the core investment focus for private debt opportunities.)
• 1,400+ — Oaktree Professionals (Indicates extensive human capital and expertise supporting the Adviser.)

Key Players & Entities

• Oaktree Strategic Credit Fund (company) — registrant
• Oaktree Fund Advisors, LLC (company) — investment adviser
• Brookfield Corporation (company) — indirect owner of Oaktree
• Brookfield Asset Management Ltd. (company) — indirect owner of Oaktree
• Armen Panossian (person) — Chief Executive Officer and Co-Chief Investment Officer of Oaktree Strategic Credit group
• SEC (regulator) — Securities and Exchange Commission
• $6,899.0 million (dollar_amount) — fair value of investment portfolio as of September 30, 2025
• $2,499.4 million (dollar_amount) — senior securities outstanding as of September 30, 2025
• $5.0 billion (dollar_amount) — Maximum Offering Amount of Common Shares
• $100.0 million (dollar_amount) — minimum offering requirement satisfied by June 1, 2022

FAQ

Risk Factors

• Investment Strategy Risks [high — financial]: The company's primary investment strategy focuses on private debt opportunities in medium-sized companies with EBITDA between $25 million and $150 million. This concentration in a specific market segment and company size could lead to significant losses if this segment underperforms or if there are adverse economic conditions affecting these companies.
• BDC Regulatory Risks [medium — financial]: As a BDC, OSCF is subject to specific regulatory requirements, including asset coverage ratios. Failure to maintain the minimum asset coverage ratio of 150% could restrict its ability to incur additional debt, impacting its investment capacity and potentially leading to forced asset sales.
• Interest Rate Sensitivity [medium — market]: The portfolio's weighted average annual yield is 9.5%, and a significant portion is in senior secured debt. Fluctuations in interest rates can impact the value of these investments and the income generated, especially if interest rates rise significantly, affecting borrowing costs for portfolio companies.
• Reliance on Adviser [medium — operational]: The company is externally managed by Oaktree Fund Advisors, LLC. Any disruption in the services provided by the Adviser, or changes in its investment strategy or personnel, could materially impact the company's operations and investment performance.
• Brookfield Acquisition Impact [medium — market]: Brookfield's agreement to acquire 100% of Oaktree, expected to close in Q1 2026, introduces uncertainty regarding potential strategic shifts, management changes, or integration challenges that could affect OSCF's investment strategy and performance.
• Limited Diversification [high — financial]: As a non-diversified investment company, OSCF may be more susceptible to the performance of a smaller number of investments compared to a diversified fund. A significant adverse event affecting a single large investment could have a material impact on the overall portfolio.

Industry Context

The private debt market, particularly for medium-sized companies, continues to be a significant area for income-focused investment strategies. BDCs like OSCF operate within a competitive landscape, seeking to provide capital to companies that may not have access to traditional bank financing. The current environment, influenced by interest rate dynamics and economic outlook, shapes the risk and return profiles of these debt investments.

Regulatory Implications

As a BDC, OSCF must adhere to strict regulations, including maintaining an asset coverage ratio of at least 150%. Failure to comply can lead to limitations on its investment activities and financial flexibility. The company's intention to qualify as a RIC also imposes specific income distribution requirements.

What Investors Should Do

1. Monitor the impact of Brookfield's full acquisition of Oaktree.
2. Assess the portfolio's sensitivity to interest rate changes.
3. Evaluate the concentration risk within the senior secured debt portfolio.

Key Dates

• 2025-09-30: Portfolio Fair Value and Share Sales Reporting — Provides a snapshot of the company's investment portfolio value ($6.9B) and capital raised ($4.8B) as of this date, indicating scale and investor confidence.
• 2026-01-01: Expected Closing of Brookfield Acquisition (Q1 2026) — Marks the completion of Brookfield's 100% ownership of Oaktree, potentially leading to strategic realignments or operational changes for OSCF.

Glossary

BDC

Business Development Company. A type of closed-end investment company that invests in small and medium-sized businesses and provides capital and advisory services. (OSCF is structured as a BDC, meaning it is subject to specific regulations and investment strategies aimed at supporting these types of companies.)

RIC

Regulated Investment Company. A tax designation for investment funds that pass through income and capital gains to shareholders, avoiding corporate income tax if certain distribution requirements are met. (OSCF intends to qualify as a RIC to avoid double taxation, which is a common structure for investment vehicles.)

Senior Secured Debt

Debt that is backed by collateral, giving the lender a priority claim on specific assets of the borrower in case of default. (This is the primary investment type for OSCF (93.3% of the portfolio), indicating a focus on lower-risk debt investments with collateral protection.)

Asset Coverage Ratio

A financial metric for BDCs that measures the ratio of a company's total assets to its total senior securities. A ratio above 150% is required by the Investment Company Act of 1940. (OSCF's ratio of 281.92% indicates a strong buffer and compliance with regulatory requirements, suggesting financial stability.)

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization. A measure of a company's operating performance. (OSCF targets medium-sized companies with EBITDA between $25 million and $150 million, defining its specific investment niche.)

Year-Over-Year Comparison

Information comparing key metrics to the previous year, such as revenue growth, margin changes, and new risks, is not available in the provided text excerpt. The filing details the current state as of September 30, 2025, and forward-looking events like the Brookfield acquisition.

Key Financial Figures

• $0.01 — Class I shares of beneficial interest, $0.01 par value 148,708,880 Class S shares
• $5.0 billion — a best efforts, continuous basis up to $5.0 billion aggregate offering price of Common Shar
• $100.0 m — se orders for Common Shares of at least $100.0 million, excluding subscriptions by Oaktr
• $3,460.1 million — ares for an aggregate purchase price of $3,460.1 million of which $100.0 million was purchased b
• $100.0 million — hase price of $3,460.1 million of which $100.0 million was purchased by an affiliate of the Ad
• $1,309.9 m — ares for an aggregate purchase price of $1,309.9 million, 170,612 Class D shares for an ag
• $4.0 m — ares for an aggregate purchase price of $4.0 million, and 52,731 Class T shares for an
• $1.2 million — ares for an aggregate purchase price of $1.2 million. As of September 30, 2025, the fair va
• $6,899.0 million — r value of our investment portfolio was $6,899.0 million and was comprised of investments in 158
• $2,499.4 million — we had senior securities outstanding of $2,499.4 million and an asset coverage ratio of 281.92%.
• $25 million — ion ("EBITDA") of between approximately $25 million and $150 million or it has an enterpris
• $150 million — f between approximately $25 million and $150 million or it has an enterprise value of betwee
• $250 million — terprise value of between approximately $250 million and $2 billion. We may look to enterpri
• $2 billion — between approximately $250 million and $2 billion. We may look to enterprise value when w

Filing Documents

• oscf-20250930.htm (10-K) — 8425KB
• exhibit42_oscf-description.htm (EX-4.2) — 83KB
• exhibit104_oscf-arselected.htm (EX-10.4) — 168KB
• exhibit109_oscf-armultixcl.htm (EX-10.9) — 30KB
• exhibit191_oscf-securities.htm (EX-19.1) — 48KB
• oscf-ex311_2025093010xk.htm (EX-31.1) — 8KB
• oscf-ex312_2025093010xk.htm (EX-31.2) — 8KB
• oscf-ex321_2025093010xk.htm (EX-32.1) — 4KB
• oscf-ex322_2025093010xk.htm (EX-32.2) — 4KB
• oscf-20250930_g1.jpg (GRAPHIC) — 22KB
• 0001872371-25-000018.txt ( ) — 33935KB
• oscf-20250930.xsd (EX-101.SCH) — 88KB
• oscf-20250930_cal.xml (EX-101.CAL) — 91KB
• oscf-20250930_def.xml (EX-101.DEF) — 449KB
• oscf-20250930_lab.xml (EX-101.LAB) — 831KB
• oscf-20250930_pre.xml (EX-101.PRE) — 636KB
• oscf-20250930_htm.xml (XML) — 8033KB

Risk Factors

Item 1A. Risk Factors 25

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 69

Cybersecurity

Item 1C. Cybersecurity 69

Properties

Item 2. Properties 70

Legal Proceedings

Item 3. Legal Proceedings 70

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 70 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 70

[Reserved] 73

Item 6. [Reserved] 73

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 74

Quantitative and Qualitative Disclosures about Market Risk

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 97

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 99

Changes in the Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in the Disagreements with Accountants on Accounting and Financial Disclosure 173

Controls and Procedures

Item 9A. Controls and Procedures 173

Other Information

Item 9B. Other Information 173

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 174 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 174

Executive Compensation

Item 11. Executive Compensation 180

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 180

Certain Relationships and Related Transaction, and Director Independence

Item 13. Certain Relationships and Related Transaction, and Director Independence 181

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services 183 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 183

Form 10-K Summary

Item 16. Form 10-K Summary 187

Signatures

Signatures 188 1 PART I

Business

Item 1. Business . General Oaktree Strategic Credit Fund (together with its subsidiaries, where applicable, the "Company", which may also be referred to as "we," "us" or "our") is structured as a non-diversified, closed-end management investment company. On February 3, 2022, we elected to be regulated as a business development company (a "BDC") under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the "Investment Company Act"). We have elected to be treated, and intend to qualify annually to be treated as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the "Code"). We are a Delaware statutory trust formed on November 24, 2021 and are externally managed by Oaktree Fund Advisors, LLC (the "Adviser" and including its affiliates, individually, or collectively, as the context requires, "Oaktree") pursuant to an investment advisory agreement (as amended and restated, the "Investment Advisory Agreement"), between us and the Adviser. Our investment objective is to generate stable current income and long-term capital appreciation. We seek to meet our investment objective by primarily investing in private debt opportunities. We have the authority to issue an unlimited number of common shares of beneficial interest, par value $0.01 per share ("Common Shares"). We are offering on a best efforts, continuous basis up to $5.0 billion aggregate offering price of Common Shares (the "Maximum Offering Amount") pursuant to an offering registered under the Securities Act of 1933, as amended (the "Securities Act"). We are authorized to offer to sell any combination of four classes of Common Shares: Class T shares, Class S shares, Class D shares and Class I shares, with a dollar value up to the Maximum Offering Amount. The share classes have different ongoing distribution and/or shareholder servici

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