Opportunistic credit finds favour as distressed loses its appeal

Several big hitters are now in the market with ambitious opportunistic credit strategies, hoping to capitalise as LPs turn away from conventional distressed plays. So, what has prompted this change of tack?

The news in August last year that Oaktree Capital Management was in the market with an ambitious $18 billion target for its latest opportunistic credit fund highlights the burgeoning appetite among LPs for strategies predicated on supporting complex borrowers through challenging times.

If it hits its target, Oaktree’s Opportunistic Fund XII would be the largest private debt fund ever raised, signalling a major shift in investor appetite away from pure distressed strategies pursuing loan-to-own or workout situations.