UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-23715
___________________________________________
(Exact name of registrant as specified in charter)
___________________________________________
Brookfield Place
225 Liberty Street, 35th Floor
New York, New York 10281
(Address of principal executive offices) (Zip code)
Brian F. Hurley, Esq.
Oaktree Diversified Income Fund Inc.
Brookfield Place
225 Liberty Street, 35th Floor
New York, New York 10281
(Name and address of agent for service)
___________________________________________
(855) 777-8001
Registrant’s telephone number, including area code
Date of fiscal year end: December 31
Date of reporting period:
Item 1. Reports to Stockholders.
(a)
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IN PROFILE Oaktree Fund Advisors, LLC (the “Adviser”), a Delaware limited liability company and a registered investment adviser under the Investment Advisers Act of 1940, as amended, serves as the investment adviser to Oaktree Diversified Income Fund Inc. (the “Fund”). The Adviser is an affiliate of Oaktree Capital Management, L.P. (“OCM”), a leading global investment management firm headquartered in Los Angeles, California focused on less efficient markets and alternative investments, and is a subsidiary of Brookfield Oaktree Holdings, LLC (formerly, Oaktree Capital Group, LLC) (collectively with OCM and the Adviser, “Oaktree”). Oaktree was founded in April 1995 and is a leader among global investment managers specializing in alternative investments. Oaktree manages assets across a wide range of investment strategies within four asset classes: Credit, Private Equity, Real Assets, and Listed Equities. As of June 30, 2026, Oaktree had $224 billion in assets under management. Brookfield Public Securities Group LLC (“PSG”) serves as the Administrator to the Fund. PSG is an indirect wholly-owned subsidiary of Brookfield Asset Management ULC (“BAM ULC”), an unlimited liability company formed under the laws of British Columbia, Canada. BAM ULC is a wholly owned subsidiary of Brookfield Asset Management Ltd. (“BAM Ltd.”), a publicly traded company (NYSE: BAM; TSX: BAM) Brookfield Corporation, a publicly traded company (NYSE: BN; TSX: BN), holds a 73% interest in BAM Ltd. As of July 31, 2026, Oaktree is a subsidiary of each of Brookfield Corporation and BAM Ltd. The Fund uses its website as a channel of distribution of material company information. Financial and other material information regarding the Fund is routinely posted on and accessible at https://privatewealth.brookfield.com/fund/oaktree-diversified-income-fund-inc. |
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TABLE OF CONTENTS |
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1 |
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3 |
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4 |
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47 |
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48 |
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49 |
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50 |
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51 |
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54 |
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Board Considerations Relating to the Approval of the Renewal of the Investment Advisory Agreement |
69 |
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73 |
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74 |
This report is for shareholder information. This is not a Prospectus intended for use in the purchase or sale of Fund shares.
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NOT FDIC INSURED |
MAY LOSE VALUE |
NOT BANK GUARANTEED |
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
Dear Shareholders,
We are pleased to provide the Semi-Annual Report for the Oaktree Diversified Income Fund (the “Fund”) for the six months ended June 30, 2026.
The Fund Class D shares returned 2.24% (net of fees) for the six-month period ended June 30, 2026 and 5.41% inception-to-date. The first half of 2026 was marked by significant market volatility and regional dispersion. In the first quarter, geopolitical developments, including the escalation of conflict involving Iran, drove oil prices and inflation expectations higher, pushed interest rates upward and weighed on global equities and fixed income markets. Risk assets recovered in the second quarter as tensions appeared to ease and the U.S. and Iran reached a 60-day ceasefire that reopened the Strait of Hormuz. Oil prices and near-term inflation expectations subsequently declined, while strong first-quarter corporate earnings also supported markets. Interest-rate performance diverged by region in the second quarter, with U.S. Treasury yields rising and government bond yields declining in the U.K. and Germany. For the six-month period, shorter-duration, higher-yielding credit generally demonstrated greater resilience than rate-sensitive fixed income.
Against this backdrop, the Fund’s diversified mix of public and private debt investments served as a source of income and return during the period. The Fund’s Class D Shares generated a total net return of 2.24%1 for the six-month period ended June 30, 2026, and ended the second quarter with a 9.49%2 annualized net distribution rate. All strategies have contributed positively this year, with private credit being the strongest contributor. Structured credit also contributed, led by gains in collateralized loan obligation (CLO) debt tranches, while real estate debt also contributed. Senior loans and high yield bonds both delivered good current income, with European credits outperforming their U.S. counterparts. Our small allocation to emerging markets corporate bonds also gained, as commodity exporters performed well amid disruptions to the Strait of Hormuz.
Macroeconomic and geopolitical factors outweighed credit fundamentals at times during the first half of the year, but we remain focused on avoiding credit losses. The ceasefire involving the U.S. and Iran may not last, and uncertainty around inflation, interest rates and global growth could continue to drive volatility. At the same time, credit fundamentals remain generally supportive, and we believe the portfolio’s emphasis on shorter-duration, higher-yielding assets may help reduce sensitivity to interest-rate movements.
We continue to favor resilient non-agency RMBS because of their low correlation to corporate credit and remain focused on attractive real estate credit opportunities. We are also evaluating opportunities in busted convertibles and high-yield bonds. Across corporate credit, we continue to examine the portfolio closely for potential risks and remain selective in sectors that may face pressure from macroeconomic uncertainty or changing technology trends.
We are excited about asset-backed finance, an area where we continue to see opportunities, and where we may earn additional yield for bearing illiquidity and underwriting a more complex asset class. These deals give us the opportunity to earn attractive income with structural projections designed to help manage risk by lending against pools of high-quality assets. We have seen strong issuance and healthy risk appetite in real estate structured credit, and we expect to grow our allocation where valuations are reasonable. While remaining highly selective, we see compelling yields on high-quality commercial and residential transactions. These assets offer yields in line or higher than those of high-yield bonds, while providing diversification benefits in the portfolio. Additionally, we have taken advantage of new issuance in Europe to increase our allocation to European high-yield bonds and senior loans in recent months, which offered a yield pickup U.S. investments when hedged to USD. Today, relative value appears fairer, so we expect to be more balanced when deploying capital into the core strategies, while rotating
____________
1 Performance data quoted represent past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Returns representing more than one year are annualized. Total Return is calculated as the change in NAV per share during the period, plus distributions per share (assuming dividends and distributions are reinvested) divided by the beginning NAV per share. Returns for periods greater than one year are annualized.
2 As of June 30, 2026. Calculated as the annualized amount of the most recent quarterly distribution declared divided by the Record Date NAV. The Fund declares and pays dividends quarterly from net investment income. To the extent these distributions exceed net investment income, they may be classified as return of capital. The Fund also pays distributions at least annually from its net realized capital gains, if any. Dividends and distributions are recorded on the ex-dividend date. All common shares have equal dividend and other distribution rights. A notice disclosing the source(s) of a distribution is provided after a payment is made from any source other than net investment income. This notice, if applicable, will be available at https://privatewealth.brookfield.com/fund/oaktree-diversifiedincome-fund-inc under Distributions. Any such notice is provided only for informational purposes in order to comply with the requirements of Section 19(a) of the 1940 Act and not for tax reporting purposes. The tax composition of the Fund’s distributions for each calendar year is reported on IRS Form 1099-DIV.
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2026 Semi-Annual Report |
1 |
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LETTER TO SHAREHOLDERS (continued) |
out of positions trading at tighter spreads and lower yields. From an issuer perspective, we are remaining cautious around companies trading at excessively wide spreads that may be over-levered and struggle to refinance should macroeconomic conditions deteriorate.
Overall, we plan to remain patient in deployment and maintain liquidity to capitalize on any potential dislocations. We believe the portfolio remains well positioned with a yield-to-worst of 10.25%,3 an average price in the mid-90s, and a duration of 1.51 years.
In addition to performance information and additional discussion of factors impacting the Fund, this report provides the Fund’s unaudited financial statements and schedule of investments as of June 30, 2026.
We welcome your questions and comments and encourage you to contact our Investor Relations team at 1-855-777-8001 or visit us at https://privatewealth.brookfield.com/ for more information.
Thank you for your support.
Sincerely,
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Brian F. Hurley |
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President |
These views represent the opinions of Oaktree Fund Advisors, LLC and are not intended to predict or depict the performance of any investment. These views are primarily as of the close of business on June 30, 2026 and subject to change based on subsequent developments.
Must be preceded or accompanied by a Prospectus.
Past performance is no guarantee of future results.
Investing involves risk. Principal loss is possible. Real assets include real estate securities, infrastructure securities and natural resources securities. Property values may fall due to increasing vacancies or declining rents resulting from unanticipated economic, legal, cultural or technological developments. Infrastructure companies may be subject to a variety of factors that may adversely affect their business, including high interest costs, high leverage, regulation costs, economic slowdown, surplus capacity, increased competition, lack of fuel availability and energy conservation policies. Natural resources securities may be affected by numerous factors, including events occurring in nature, inflationary pressures and international politics.
Quasar Distributors, LLC is the distributor of Oaktree Diversified Income Fund Inc.
____________
3 Yield to worst is a measure of the lowest possible yield that can be received on a bond that fully operates within the terms of its contract without defaulting.
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2 |
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ASSETS BY SECTOR1 |
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Private Credit |
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— Senior Loans |
31.5% |
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— Senior Loans (Syndicated) |
3.7% |
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— Private Placement Equity |
1.5% |
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— Preferred Stock |
0.3% |
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— Common Stock |
0.0% |
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— Warrants |
0.0% |
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Total Private Credit |
37.0% |
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Corporate Credit |
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— Senior Loans (Syndicated) |
19.4% |
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— High Yield |
16.0% |
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— Investment Grade Bonds |
0.1% |
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Total Corporate Credit |
35.5% |
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Structured Credit |
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— Collateralized Loan Obligations |
8.2% |
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— Asset-Backed Securities |
7.2% |
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— Residential Mortgage-Backed Securities |
3.6% |
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— Commercial Mortgage-Backed Securities |
3.4% |
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— High Yield |
0.5% |
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Total Structured Credit |
22.9% |
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Emerging Markets |
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— High Yield |
3.3% |
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Short-Term Investments |
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— Money Market Funds |
1.0% |
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— U.S Treasury Bills |
0.3% |
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Total Short-Term Investments |
1.3% |
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Total |
100.0% |
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____________
1 Percentages are based on total market value of investments.
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2026 Semi-Annual Report |
3 |
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Par |
Value |
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PRIVATE CREDIT – 50.0% |
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Senior Loans – 42.5% (a) |
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Aerospace & Defense – 0.3% |
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WP CPP Holdings, |
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6.78% (3 mo. SOFR US + 3.13%), 11/28/2029, (0.00% Floor) (b) |
836,387 |
$ |
835,133 |
||||
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6.78% (3 mo. SOFR US + 3.13%) (or 4.13% PIK), 11/28/2029, (0.00% Floor) (b) |
71,176 |
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71,069 |
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WP CPP Holdings, |
90,000 |
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0 |
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906,202 |
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Beverages – 1.4% |
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Clase Azul, Revolver, |
667,000 |
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13,089 |
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Tequilas Premium Term Loan |
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13.17%, 03/06/2031 (b) |
1,975,000 |
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1,937,080 |
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4.67%, 03/06/2031 (b) |
2,000,000 |
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1,962,800 |
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3,912,969 |
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Biotechnology – 0.4% |
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ADC Therapeutics, Inc., |
1,135,543 |
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1,129,524 |
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Building Products – 0.7% |
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Geotechnical Merger Sub, |
1,682,000 |
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1,665,012 |
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Geotechnical Merger Sub, |
623,000 |
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348,440 |
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Geotechnical Merger Sub, |
234,000 |
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54,043 |
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2,067,495 |
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Commercial Services & Supplies – 1.8% |
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Kings Buyer LLC, |
472,406 |
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331,063 |
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NFM & J LP, |
482,748 |
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473,914 |
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NFM & J LP, |
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10.94% (1 mo. SOFR US + 5.75%), 11/30/2028, (1.00% Floor) (b)(c) |
12,023 |
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6,394 |
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11.50% (Prime Rate + 4.75%), 11/30/2028, (1.00% Floor) (b)(c) |
98,340 |
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52,292 |
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NFM & J LP, |
30,369 |
|
29,813 |
||||
____________
See Notes to Consolidated Financial Statements.
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4 |
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OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
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Par |
Value |
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PRIVATE CREDIT (continued) |
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USIC Holdings, |
3,287,888 |
$ |
3,241,528 |
||||
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USIC Holdings, |
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6.29% (3 mo. SOFR US + 2.63%), 09/10/2031, (0.00% Floor) (b) |
527,895 |
|
522,774 |
||||
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6.29% (3 mo. SOFR US + 2.63%), 09/10/2031, (0.00% Floor) (b) |
4,184 |
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4,143 |
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USIC Holdings, |
196,146 |
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155,852 |
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USIC Holdings, |
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||||||
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11.00% (Prime Rate + 4.25%), 09/10/2031, (0.00% Floor) (b)(c) |
11,592 |
|
10,776 |
||||
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8.91% (3 mo. SOFR US + 5.25%), 09/10/2031, (0.00% Floor) (b)(c) |
23,185 |
|
21,552 |
||||
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8.92% (3 mo. SOFR US + 5.25%), 09/10/2031, (0.00% Floor) (b)(c) |
77,669 |
|
72,198 |
||||
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8.92% (3 mo. SOFR US + 5.25%), 09/10/2031, (0.00% Floor) (b)(c) |
28,981 |
|
26,940 |
||||
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8.93% (3 mo. SOFR US + 5.25%), 09/10/2031, (0.00% Floor) (b)(c) |
40,573 |
|
37,715 |
||||
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|
4,986,954 |
||||||
|
Communications Equipment – 0.5% |
|
||||||
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Sorenson Communications, |
1,515,550 |
|
1,493,878 |
||||
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Sorenson Communications, |
198,000 |
|
0 |
||||
|
|
1,493,878 |
||||||
|
Consumer Finance – 1.3% |
|
||||||
|
CPS Mezzanine, |
3,750,000 |
|
3,482,968 |
||||
|
Consumer Staples Distribution & Retail – 0.7% |
|
||||||
|
Blazing Star Parent, |
1,832,975 |
|
1,793,749 |
||||
|
Distributors – 1.3% |
|
||||||
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NEFCO, |
3,330,112 |
|
3,314,460 |
||||
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NEFCO, |
713,595 |
|
0 |
||||
|
NFO Orange Buyer, |
475,730 |
|
260,422 |
||||
|
|
3,574,882 |
||||||
____________
See Notes to Consolidated Financial Statements.
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2026 Semi-Annual Report |
5 |
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OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
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|
Par |
Value |
|||||
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PRIVATE CREDIT (continued) |
|
||||||
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Diversified Consumer Services – 0.6% |
|
||||||
|
AVSC Holding, |
119,901 |
$ |
117,911 |
||||
|
AVSC Holding, |
|
||||||
|
8.61% (1 mo. SOFR US + 5.00%), 12/05/2029, (0.00% Floor) (b) |
2,706 |
|
2,667 |
||||
|
8.62% (1 mo. SOFR US + 5.00%), 12/05/2029, (0.00% Floor) (b) |
8,119 |
|
8,000 |
||||
|
8.64% (1 mo. SOFR US + 5.00%), 12/05/2029, (0.00% Floor) (b) |
5,413 |
|
5,333 |
||||
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9.53% (3 mo. SOFR US + 5.00%), 12/05/2029, (0.00% Floor) (b) |
0 |
|
0 |
||||
|
Legends Hospitality Holding Co., |
1,330,371 |
|
1,306,025 |
||||
|
Legends Hospitality Holding Co., |
|
||||||
|
8.65% (3 mo. SOFR US + 5.00%), 08/22/2031, (0.00% Floor) (b) |
12,888 |
|
12,652 |
||||
|
8.66% (3 mo. SOFR US + 5.00%), 08/22/2031, (0.00% Floor) (b) |
62,647 |
|
61,500 |
||||
|
Legends Hospitality Holding Co., |
|
||||||
|
8.64% (1 mo. SOFR US + 5.00%), 08/22/2030, (0.00% Floor) (b)(c) |
40,966 |
|
21,208 |
||||
|
8.64% (1 mo. SOFR US + 5.00%), 08/22/2030, (0.00% Floor) (b)(c) |
109,243 |
|
56,555 |
||||
|
8.67%, 08/22/2030, (0.00% Floor) (b)(c) |
1,791 |
|
927 |
||||
|
|
1,592,778 |
||||||
|
Diversified Telecommunication Services – 1.1% |
|
||||||
|
Fiber Intermediate Holdings, |
3,000,000 |
|
2,910,000 |
||||
|
Electrical Equipment – 1.7% |
|
||||||
|
Inventus Buyer, |
4,761,000 |
|
4,680,063 |
||||
|
Inventus Buyer, |
539,000 |
|
105,967 |
||||
|
|
4,786,030 |
||||||
|
Financial Services – 1.4% |
|
||||||
|
Minotaur Acquisition, |
2,610,880 |
|
2,587,643 |
||||
|
Minotaur Acquisition, |
1,013,922 |
|
1,004,898 |
||||
|
Minotaur Acquisition, |
334,910 |
|
331,929 |
||||
|
MTC Holdings, |
103,000 |
|
0 |
||||
|
|
3,924,470 |
||||||
____________
See Notes to Consolidated Financial Statements.
|
6 |
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OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
PRIVATE CREDIT (continued) |
|
||||||
|
Food Products – 0.4% |
|
||||||
|
Protein For Pets Opco, |
974,120 |
$ |
956,586 |
||||
|
Protein For Pets Opco, |
103,000 |
|
0 |
||||
|
|
956,586 |
||||||
|
Ground Transportation – 3.1% |
|
||||||
|
Recess Topco Partnership, |
8,849,720 |
|
8,682,460 |
||||
|
Health Care Equipment & Supplies – 3.2% |
|
||||||
|
Bayou Intermediate II, |
4,218,000 |
|
4,181,303 |
||||
|
Bayou Intermediate II, |
|
||||||
|
4.75% (1 mo. SOFR US + 4.75%), 09/30/2032, (0.75% Floor) (b)(c) |
130,682 |
|
101,045 |
||||
|
8.39% (1 mo. SOFR US + 4.75%), 09/30/2032, (0.75% Floor) (b)(c) |
923,485 |
|
714,051 |
||||
|
8.41% (3 mo. SOFR US + 4.75%), 09/30/2032, (0.75% Floor) (b)(c) |
95,833 |
|
74,100 |
||||
|
Bayou Intermediate II, |
|
||||||
|
8.41% (3 mo. SOFR US + 4.75%), 09/30/2032, (0.00% Floor) (b)(c) |
251,897 |
|
121,732 |
||||
|
8.48% (3 mo. SOFR US + 4.75%), 09/30/2032, (0.00% Floor) (b)(c) |
362,103 |
|
174,989 |
||||
|
Spruce Bidco II, |
|
||||||
|
7.05% (TCOR (3 months) + 4.75%), 01/30/2032, (0.75% Floor) (b) |
CAD |
490,200 |
|
342,665 |
|||
|
8.41% (6 mo. SOFR US + 4.75%), 01/30/2032, (0.75% Floor) (b) |
2,696,760 |
|
2,673,568 |
||||
|
8.87% (Daily SOFR + 5.25%), 01/30/2032, (0.75% Floor) (b) |
JPY |
52,414,590 |
|
319,591 |
|||
|
Spruce Bidco II, |
|
||||||
|
8.37% (6 mo. SOFR US + 4.75%), 01/30/2032, (0.75% Floor) (b)(c) |
175,429 |
|
67,642 |
||||
|
8.41% (3 mo. SOFR US + 4.75%), 01/30/2032, (0.75% Floor) (b)(c) |
175,429 |
|
67,642 |
||||
|
8.46% (1 mo. SOFR US + 4.75%), 01/30/2032, (0.75% Floor) (b)(c) |
263,143 |
|
101,464 |
||||
|
|
8,939,792 |
||||||
|
Health Care Providers & Services – 1.8% |
|
||||||
|
ACESO HOLDING, |
EUR |
1,529,000 |
|
1,731,131 |
|||
|
ACESO HOLDING, |
EUR |
382,000 |
|
432,500 |
|||
|
LSL Holdco, |
266,412 |
|
186,657 |
||||
|
LSL Holdco LLC, |
2,295,806 |
|
2,234,049 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
7 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
PRIVATE CREDIT (continued) |
|
||||||
|
LSL Holdco LLC, |
267,372 |
$ |
260,179 |
||||
|
PetVet Care Centers LLC, |
|
||||||
|
9.61% (1 mo. SOFR US + 6.00%), 11/15/2029, (0.75% Floor) (b)(c) |
102,333 |
|
27,476 |
||||
|
9.62% (1 mo. SOFR US + 6.00%), 11/15/2029, (0.75% Floor) (b)(c) |
102,333 |
|
27,477 |
||||
|
9.64% (1 mo. SOFR US + 6.00%), 11/15/2029, (0.75% Floor) (b)(c) |
102,333 |
|
27,476 |
||||
|
Premium Parent, |
744,919 |
|
178,887 |
||||
|
|
5,105,832 |
||||||
|
Health Care Technology – 2.5% |
|
||||||
|
Next Holdco LLC, |
80,000 |
|
0 |
||||
|
NextGen Healthcare, Inc., |
811,325 |
|
804,672 |
||||
|
Premium Parent, |
6,156,756 |
|
6,048,397 |
||||
|
|
6,853,069 |
||||||
|
Hotels, Restaurants & Leisure – 2.6% |
|
||||||
|
Grove Waterpark and Resort, |
1,688,003 |
|
1,591,956 |
||||
|
Grove Waterpark and Resort, |
350,754 |
|
330,796 |
||||
|
Grove Waterpark and Resort, |
175,377 |
|
82,699 |
||||
|
Intralot Capital Lux, |
GBP |
4,057,000 |
|
5,285,094 |
|||
|
|
7,290,545 |
||||||
|
Insurance – 1.3% |
|
||||||
|
Integrity Marketing Acquisition LLC, |
2,476,688 |
|
2,474,212 |
||||
|
Integrity Marketing Acquisition LLC, |
234,995 |
|
0 |
||||
|
Integrity Marketing Acquisition LLC, |
519,866 |
|
0 |
||||
|
THG Acquisition, |
1,056,625 |
|
1,054,617 |
||||
____________
See Notes to Consolidated Financial Statements.
|
8 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
PRIVATE CREDIT (continued) |
|
||||||
|
THG Acquisition, |
238,480 |
$ |
176,585 |
||||
|
THG Acquisition, Senior Secured First Lien Revolver |
|
||||||
|
8.39% (1 mo. SOFR US + 4.75%), 10/31/2031, (0.75% Floor) (b)(c) |
118,573 |
|
29,085 |
||||
|
9.07%, 10/31/2031, (0.75% Floor) (b)(c) |
427 |
|
105 |
||||
|
|
3,734,604 |
||||||
|
Life Sciences Tools & Services – 1.7% |
|
||||||
|
Creek Parent, |
3,245,913 |
|
3,197,873 |
||||
|
Creek Parent, |
471,000 |
|
0 |
||||
|
Europa Biosite, |
SEK |
7,540,000 |
|
763,693 |
|||
|
Europa Biosite, |
GBP |
584,527 |
|
761,625 |
|||
|
Europa Biosite, |
SEK |
9,158,000 |
|
0 |
|||
|
|
4,723,191 |
||||||
|
Machinery – 0.7% |
|
||||||
|
ProFrac Holdings II LLC, |
975,000 |
|
960,278 |
||||
|
Truck-Lite Company, |
1,019,378 |
|
1,009,694 |
||||
|
Truck-Lite Company, |
21,939 |
|
21,731 |
||||
|
Truck-Lite Company, |
105,000 |
|
0 |
||||
|
|
1,991,703 |
||||||
|
Oil, Gas & Consumable Fuels – 1.1% |
|
||||||
|
Jonah Energy South Texas, |
3,073,000 |
|
3,044,114 |
||||
|
Personal Care Products – 0.6% |
|
||||||
|
Silk Holdings III, |
1,661,940 |
|
1,645,985 |
||||
|
Silk Holdings III, |
113,000 |
|
7,834 |
||||
|
|
1,653,819 |
||||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
9 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
PRIVATE CREDIT (continued) |
|
||||||
|
Pharmaceuticals – 1.7% |
|
||||||
|
Bioxcel Therapeutics, Inc., |
893,400 |
$ |
781,189 |
||||
|
Bioxcel Therapeutics, Inc., |
370,321 |
|
323,809 |
||||
|
Resistance Holdings, |
3,655,275 |
|
3,603,370 |
||||
|
Resistance Holdings, |
312,000 |
|
0 |
||||
|
|
4,708,368 |
||||||
|
Professional Services – 0.3% |
|
||||||
|
Kite Midco II, |
|
||||||
|
8.17% (3 mo. SOFR US + 4.50%), 11/25/2031, (0.00% Floor) (b) |
438,500 |
|
434,860 |
||||
|
8.23% (6 mo. SOFR US + 4.50%), 11/25/2031, (0.00% Floor) (b) |
438,500 |
|
434,861 |
||||
|
Kite Midco II, |
216,000 |
|
0 |
||||
|
|
869,721 |
||||||
|
Real Estate Management & Development – 2.1% |
|
||||||
|
Lightbox Intermediate, |
1,182,038 |
|
1,150,950 |
||||
|
Lightbox Intermediate, |
77,000 |
|
0 |
||||
|
The Iris, |
4,750,000 |
|
4,677,757 |
||||
|
|
5,828,707 |
||||||
|
Software – 6.2% |
|
||||||
|
Angel Lux Bidco, |
3,929,000 |
|
3,845,705 |
||||
|
Angel Lux Bidco, |
425,826 |
|
0 |
||||
|
CentralSquare Technologies, |
66,000 |
|
0 |
||||
|
Evergreen IX Borrower, |
|
||||||
|
8.48% (3 mo. SOFR US + 4.75%), 09/29/2030, (0.75% Floor) (b) |
1,118,325 |
|
1,110,049 |
||||
|
8.48% (3 mo. SOFR US + 4.75%), 09/29/2030, (0.00% Floor) (b) |
282,475 |
|
280,356 |
||||
|
Evergreen IX Borrower, |
127,000 |
|
0 |
||||
____________
See Notes to Consolidated Financial Statements.
|
10 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
PRIVATE CREDIT (continued) |
|
||||||
|
ICIMS, Inc., |
1,779,695 |
$ |
1,665,795 |
||||
|
ICIMS, Inc., |
|
||||||
|
5.75% (3 mo. SOFR US + 5.75%), 08/15/2028, (1.00% Floor) (b)(c) |
15,877 |
|
4,310 |
||||
|
9.41% (1 mo. SOFR US + 5.75%), 08/15/2028, (1.00% Floor) (b)(c) |
73,280 |
|
19,891 |
||||
|
9.41% (3 mo. SOFR US + 5.75%), 08/15/2028, (1.00% Floor) (b)(c) |
68,395 |
|
18,565 |
||||
|
Monotype Imaging Holdings, |
29,864 |
|
28,717 |
||||
|
Monotype Imaging Holdings, |
176,000 |
|
0 |
||||
|
Monotype Imaging Holdings, |
1,380,820 |
|
1,327,796 |
||||
|
MRI Software LLC, |
218,398 |
|
213,681 |
||||
|
Optimizely North America, |
|
||||||
|
5.46% (1 mo. EURIBOR + 3.25%), 10/30/2031, (0.00% Floor) (b) |
EUR |
547,075 |
|
591,769 |
|||
|
5.46% (1 mo. EURIBOR + 3.25%), 10/30/2031, (0.00% Floor) (b) |
EUR |
2,326 |
|
2,516 |
|||
|
6.64% (1 mo. SOFR US + 3.00%), 10/30/2031, (0.00% Floor) (b) |
1,529,193 |
|
1,449,369 |
||||
|
6.64% (1 mo. SOFR US + 3.00%), 10/30/2031, (0.00% Floor) (b) |
6,501 |
|
6,162 |
||||
|
7.23% (SONIA + 3.50%), 10/30/2031, (0.00% Floor) (b) |
GBP |
777 |
|
977 |
|||
|
7.23% (SONIA + 3.50%), 10/30/2031, (0.00% Floor) (b) |
GBP |
182,742 |
|
229,867 |
|||
|
Optimizely North America, |
231,000 |
|
0 |
||||
|
Pluralsight Inc, |
|
||||||
|
6.62% (1 mo. SOFR US + 3.00%), 08/22/2029, (0.00% Floor) (b) |
82,746 |
|
80,512 |
||||
|
6.62% (1 mo. SOFR US + 3.00%) (or 1.50% PIK), 08/22/2029, (0.00% Floor) (b) |
2,269 |
|
2,208 |
||||
|
Pluralsight Inc, |
|
||||||
|
3.67% (1 mo. SOFR US + 7.50%), 08/22/2029, (0.00% Floor) (b) |
125,373 |
|
6,269 |
||||
|
3.67% (1 mo. SOFR US) (or 12.01% PIK), 08/22/2029, (0.00% Floor) (b) |
30,557 |
|
1,528 |
||||
|
Pluralsight Inc, |
60,308 |
|
0 |
||||
|
Pluralsight Inc, |
24,123 |
|
0 |
||||
|
Pluralsight Restructure, |
|
||||||
|
6.64% (1 mo. SOFR US + 3.00%), 08/22/2029, (0.00% Floor) (b) |
47,764 |
|
46,475 |
||||
|
6.64% (1 mo. SOFR US + 3.00%) (or 1.50% PIK), 08/22/2029, (0.00% Floor) (b) |
1,375 |
|
1,338 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
11 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
PRIVATE CREDIT (continued) |
|
||||||
|
Thrive Bidco Term Loan |
|
||||||
|
7.45%, 03/10/2033 (b) |
3,557,740 |
$ |
3,489,787 |
||||
|
8.86%, 03/10/2033 (b) |
EUR |
1,313,560 |
|
1,472,202 |
|||
|
8.98%, 03/10/2033 (b)(c) |
GBP |
1,890,000 |
|
0 |
|||
|
User Zoom Technologies, |
|
||||||
|
9.65% (3 mo. SOFR US + 6.00%), 04/05/2029, (1.00% Floor) (b) |
1,348,000 |
|
1,272,782 |
||||
|
9.65% (3 mo. SOFR US + 6.00%), 04/05/2029, (1.00% Floor) (b) |
10,047 |
|
9,486 |
||||
|
9.67% (3 mo. SOFR US + 6.00%), 04/05/2029, (0.00% Floor) (b) |
108,570 |
|
102,511 |
||||
|
9.67% (3 mo. SOFR US + 6.00%), 04/05/2029, (0.00% Floor) (b) |
475 |
|
448 |
||||
|
|
17,281,071 |
||||||
|
Total Senior Loans |
|
118,225,481 |
|||||
|
Senior Loans (Syndicated) – 5.0% (a) |
|
||||||
|
Commercial Services & Supplies – 0.7% |
|
||||||
|
Kings Buyer LLC, |
2,178,666 |
|
2,059,275 |
||||
|
Electrical Equipment – 0.8% |
|
||||||
|
Resilience Parent LLC, |
2,097,549 |
|
2,077,622 |
||||
|
Health Care Equipment & Supplies – 1.4% |
|
||||||
|
Hopper Merger Sub, Inc., |
3,942,596 |
|
3,910,582 |
||||
|
Health Care Providers & Services – 0.7% |
|
||||||
|
PetVet Care Centers LLC, |
2,297,100 |
|
2,055,904 |
||||
|
Interactive Media & Services – 0.6% |
|
||||||
|
Ancestry.com, Inc., |
1,600,168 |
|
1,600,168 |
||||
|
Software – 0.8% |
|
||||||
|
CentralSquare Technologies, |
|
||||||
|
9.37% (1 mo. SOFR US + 5.75%), 04/12/2031, (0.00% Floor) (b) |
568,867 |
|
554,646 |
||||
|
9.37% (1 mo. SOFR US + 5.75%) (or 3.50% PIK), 04/12/2031, (0.00% Floor) (b) |
31,545 |
|
30,756 |
||||
|
ICIMS, Inc., |
253,659 |
|
239,834 |
||||
|
MRI Software LLC, |
1,394,693 |
|
1,364,568 |
||||
|
MRI Software LLC, |
166,000 |
|
40,604 |
||||
|
|
2,230,408 |
||||||
|
Total Senior Loans (Syndicated) |
|
13,933,959 |
|||||
____________
See Notes to Consolidated Financial Statements.
|
12 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Shares |
Value |
|||||
|
PRIVATE CREDIT (continued) |
|
||||||
|
Private Placement Equity – 2.1% |
|
||||||
|
Distributors – 0.1% |
|
||||||
|
RelaDyne, |
2,000 |
$ |
259,000 |
||||
|
Financial Services – 0.6% |
|
||||||
|
Hometap Private Placement Equity (b)(g) |
1,625,000 |
|
1,658,475 |
||||
|
Ground Transportation – 0.9% |
|
||||||
|
OUTGO, INC. (b)(g) |
2,447,296 |
|
2,483,026 |
||||
|
Health Care Technology – 0.5% |
|
||||||
|
Impel Pharma, Inc. (b)(g) |
754,923 |
|
1,373,960 |
||||
|
Software – 0.0% (h) |
|
||||||
|
Pluralsight Inc. (b)(g) |
41,791 |
|
0 |
||||
|
Total Private Placement Equity |
|
5,774,461 |
|||||
|
Preferred Stock – 0.4% |
|
||||||
|
Health Care Providers & Services – 0.1% |
|
||||||
|
Petvet, Inc., |
203 |
|
238,426 |
||||
|
Health Care Technology – 0.3% |
|
||||||
|
AthenaHealth Group, Inc., |
533 |
|
838,137 |
||||
|
Total Preferred Stock |
|
1,076,563 |
|||||
|
Common Stock – 0.0% (h) |
|
||||||
|
Containers & Packaging – 0.0% (h) |
|
||||||
|
Ardagh Holdings SA (g) |
EUR |
10,329 |
|
70,003 |
|||
|
Pharmaceuticals – 0.0% (h) |
|
||||||
|
Bioxcel Therapeutics, Inc. (g) |
20,354 |
|
28,699 |
||||
|
Total Common Stock |
|
98,702 |
|||||
|
Warrants – 0.0% (h) |
|
||||||
|
Biotechnology – 0.0% (h) |
|
||||||
|
ADC Therapeutics – (Exercise price: $8.30, Expiration: 08/15/2032), |
4,988 |
|
100 |
||||
|
Mesoblast, Inc. – (Exercise Price: $7.26, Expiration: 11/19/2026), |
23,222 |
|
49,695 |
||||
|
Seres Therapeutics, Inc. – (Exercise price: $6.69, Expiration: 04/27/2030), |
237 |
|
270 |
||||
|
|
50,065 |
||||||
|
Pharmaceuticals – 0.0% (h) |
|
||||||
|
Bioxcel Therapeutics, Inc. – (Exercise price: $3.07, Expiration: 04/19/2029), |
78 |
|
37 |
||||
|
Bioxcel Therapeutics, Inc. – (Exercise price: $3.65, Expiration: 04/19/2029), |
274 |
|
132 |
||||
|
|
169 |
||||||
|
Total Warrants |
|
50,234 |
|||||
|
TOTAL PRIVATE CREDIT |
|
139,159,400 |
|||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
13 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT – 47.9% |
|
||||||
|
Senior Loans (Syndicated) – 26.1% (a) |
|
||||||
|
Aerospace & Defense – 0.2% |
|
||||||
|
TransDigm, Inc., |
505,237 |
$ |
505,899 |
||||
|
TransDigm, Inc., |
24,938 |
|
24,966 |
||||
|
|
530,865 |
||||||
|
Air Freight & Logistics – 0.2% |
|
||||||
|
Radar Bidco Sarl, |
EUR |
410,000 |
|
471,685 |
|||
|
Automobiles – 0.2% |
|
||||||
|
MajorDrive Holdings IV LLC, |
580,590 |
|
558,952 |
||||
|
Beverages – 0.4% |
|
||||||
|
Pegasus Bidco BV, |
555,443 |
|
556,371 |
||||
|
Refresco, |
EUR |
434,985 |
|
499,713 |
|||
|
|
1,056,084 |
||||||
|
Building Products – 0.4% |
|
||||||
|
Altadia Group Corporate SA, |
EUR |
300,000 |
|
318,642 |
|||
|
BME Group Holding BV, |
EUR |
1,000,000 |
|
968,996 |
|||
|
|
1,287,638 |
||||||
|
Capital Markets – 0.3% |
|
||||||
|
DRW Holdings LLC, |
782,020 |
|
753,136 |
||||
|
Chemicals – 2.2% |
|
||||||
|
Akzo Nobel Specialty Chemicals, |
EUR |
35,028 |
|
40,127 |
|||
|
Bond German Bidco 1 GmbH, |
EUR |
310,000 |
|
355,682 |
|||
|
Ceramtec, |
EUR |
500,000 |
|
575,554 |
|||
|
INEOS Finance PLC, |
EUR |
247,403 |
|
258,588 |
|||
____________
See Notes to Consolidated Financial Statements.
|
14 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
INEOS Quattro Holdings UK Ltd., |
|
||||||
|
6.43% (1 mo. EURIBOR + 4.25%), 01/29/2026, (0.00% Floor) |
EUR |
200,000 |
$ |
195,903 |
|||
|
6.68% (1 mo. EURIBOR + 4.50%), 03/29/2029, (0.00% Floor) |
EUR |
250,000 |
|
249,586 |
|||
|
INEOS US Finance LLC, |
473,284 |
|
437,078 |
||||
|
Kersia International, |
EUR |
500,000 |
|
575,760 |
|||
|
Nobian Finance BV, |
|
||||||
|
5.80% (6 mo. EURIBOR + 3.65%), 07/09/2029, (0.00% Floor) |
EUR |
185,000 |
|
203,401 |
|||
|
5.84% (3 mo. EURIBOR + 3.40%), 07/15/2030, (0.00% Floor) |
EUR |
425,000 |
|
463,676 |
|||
|
Nouryon Finance BV, |
|
||||||
|
5.69% (1 mo. EURIBOR + 3.50%), 04/03/2028, (0.00% Floor) |
EUR |
87,667 |
|
100,430 |
|||
|
5.79% (3 mo. EURIBOR + 3.50%), 04/03/2028, (0.00% Floor) |
EUR |
177,305 |
|
203,118 |
|||
|
Rohm Holding GmbH, |
EUR |
486,184 |
|
541,451 |
|||
|
SCIH Salt Holdings, Inc., |
679,907 |
|
681,515 |
||||
|
SCIL IV LLC, |
EUR |
500,000 |
|
573,083 |
|||
|
Touchdown Acquirer, Inc., |
316,404 |
|
313,998 |
||||
|
Windsor Holdings III LLC, |
291,821 |
|
292,186 |
||||
|
|
6,061,136 |
||||||
|
Commercial Services & Supplies – 2.0% |
|
||||||
|
Access CIG LLC, |
604,772 |
|
539,572 |
||||
|
Admiral Bidco GmbH, |
EUR |
380,000 |
|
437,812 |
|||
|
Allied Universal Holdco LLC, |
727,667 |
|
728,864 |
||||
|
Atlas Luxco, |
EUR |
545,875 |
|
629,780 |
|||
|
Garda World Security Corp., |
728,206 |
|
728,206 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
15 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Gategroup Finance International Sarl, |
EUR |
275,000 |
$ |
316,492 |
|||
|
Luna 2 5SARL, |
EUR |
500,000 |
|
575,974 |
|||
|
Talbot Participation SAS, |
EUR |
335,000 |
|
385,449 |
|||
|
Trugreen LP, |
593,586 |
|
569,843 |
||||
|
TTD Holding IV GmbH, |
EUR |
500,000 |
|
567,325 |
|||
|
|
5,479,317 |
||||||
|
Communications Equipment – 0.2% |
|
||||||
|
Viasat, Inc., |
659,070 |
|
663,809 |
||||
|
Construction & Engineering – 0.3% |
|
||||||
|
Artera Services LLC, |
311,056 |
|
275,972 |
||||
|
Tiger Acquisition LLC, |
590,208 |
|
592,504 |
||||
|
|
868,476 |
||||||
|
Consumer Staples Distribution & Retail – 0.3% |
|
||||||
|
Boots Group Bidco Ltd., |
EUR |
390,000 |
|
450,184 |
|||
|
ZF Invest SAS, |
EUR |
255,000 |
|
291,163 |
|||
|
|
741,347 |
||||||
|
Containers & Packaging – 0.6% |
|
||||||
|
Charter Next Generation, Inc., |
617,944 |
|
618,843 |
||||
|
Clydesdale Acquisition Holdings, Inc., |
|
||||||
|
6.82% (1 mo. SOFR US + 3.18%), 04/13/2029, (0.50% Floor) |
100,000 |
|
98,394 |
||||
|
6.89% (1 mo. SOFR US + 3.25%), 04/01/2032, (0.00% Floor) |
393,852 |
|
379,246 |
||||
|
Proampac PG Borrower LLC, |
|
||||||
|
7.66% (3 mo. SOFR US + 4.00%), 03/07/2033, (0.00% Floor) |
371,560 |
|
365,986 |
||||
|
7.67% (3 mo. SOFR US + 4.00%), 03/07/2033, (0.00% Floor) |
153,440 |
|
151,139 |
||||
|
|
1,613,608 |
||||||
____________
See Notes to Consolidated Financial Statements.
|
16 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Distributors – 0.2% |
|
||||||
|
Dealer Tire Financial LLC, |
487,104 |
$ |
484,059 |
||||
|
Diversified Consumer Services – 1.0% |
|
||||||
|
AI Aqua Merger Sub, Inc., |
450,000 |
|
450,254 |
||||
|
AI Aqua Merger Sub, Inc., |
|
||||||
|
6.12% (1 mo. SOFR US + 2.50%), 07/31/2028, (0.00% Floor) |
262,767 |
|
262,832 |
||||
|
6.16% (3 mo. SOFR US + 2.50%), 07/31/2028, (0.00% Floor) |
264,088 |
|
264,153 |
||||
|
Armorica Lux Sarl, |
EUR |
500,000 |
|
572,252 |
|||
|
Cervantes Bidco SL, |
EUR |
425,000 |
|
488,201 |
|||
|
HMH CO, |
49,871 |
|
44,884 |
||||
|
Houghton Mifflin Harcourt Co., |
429,259 |
|
341,062 |
||||
|
KUEHG Corp., |
382,688 |
|
369,427 |
||||
|
|
2,793,065 |
||||||
|
Diversified Telecommunication Services – 0.4% |
|
||||||
|
Altice France SA, |
EUR |
491,581 |
|
574,010 |
|||
|
Numericable, |
348,831 |
|
350,722 |
||||
|
Uniti Services LLC, |
110,295 |
|
111,122 |
||||
|
|
1,035,854 |
||||||
|
Electronic Equipment, Instruments & Components – 0.1% |
|
||||||
|
Project Aurora US Finco, Inc., |
EUR |
310,000 |
|
357,053 |
|||
|
Entertainment – 0.7% |
|
||||||
|
City Football Group Ltd., |
720,963 |
|
719,972 |
||||
|
Discovery Global Holdings, Inc., |
245,192 |
|
245,565 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
17 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
OAK-Eagle Acquireco, Inc., |
EUR |
500,000 |
$ |
574,734 |
|||
|
StubHub Holdco Sub LLC, |
541,833 |
|
546,065 |
||||
|
|
2,086,336 |
||||||
|
Financial Services – 0.3% |
|
||||||
|
Apex Group Treasury Ltd., |
EUR |
105,000 |
|
116,704 |
|||
|
Galaxy Bidco Ltd., |
EUR |
500,000 |
|
578,679 |
|||
|
Nexus Buyer LLC, |
99,749 |
|
96,774 |
||||
|
|
792,157 |
||||||
|
Food Products – 0.6% |
|
||||||
|
Froneri Lux FinCo SARL, |
EUR |
500,000 |
|
569,130 |
|||
|
POP Bidco SAS, |
EUR |
510,000 |
|
586,471 |
|||
|
Upfield (Flora Food), |
GBP |
500,000 |
|
635,371 |
|||
|
|
1,790,972 |
||||||
|
Ground Transportation – 0.2% |
|
||||||
|
Kenan Advantage Group, Inc., |
698,424 |
|
700,750 |
||||
|
Health Care Equipment & Supplies – 0.3% |
|
||||||
|
Argent Bidco SAS, |
EUR |
500,000 |
|
576,297 |
|||
|
Hopper Merger Sub, Inc., |
400,000 |
|
391,918 |
||||
|
|
968,215 |
||||||
|
Health Care Providers & Services – 2.7% |
|
||||||
|
Almaviva Developpement SASU, |
EUR |
500,000 |
|
575,940 |
|||
|
Baart Programs, Inc., |
|
||||||
|
8.99% (3 mo. SOFR US + 5.00%), 06/11/2027, (1.00% Floor) (b) |
3,489 |
|
3,101 |
||||
|
9.26% (3 mo. SOFR US + 5.00%), 06/11/2027, (1.00% Floor) (b) |
697,772 |
|
620,180 |
||||
____________
See Notes to Consolidated Financial Statements.
|
18 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Baart Programs, Inc., |
225,074 |
$ |
200,045 |
||||
|
Baart Programs, Inc., |
|
||||||
|
12.70% (3 mo. SOFR US + 8.50%), 06/11/2028, (1.00% Floor) (b) |
109,025 |
|
3,271 |
||||
|
14.76% (3 mo. SOFR US + 8.50%), 06/11/2028, (1.00% Floor) (b) |
475,131 |
|
14,254 |
||||
|
Celeste BidCo BV, |
EUR |
390,000 |
|
450,626 |
|||
|
CHG Healthcare Services, Inc., |
603,825 |
|
604,739 |
||||
|
Covetrus, Inc., |
884,425 |
|
858,997 |
||||
|
Elsan SAS, |
EUR |
135,000 |
|
152,592 |
|||
|
Global Medical Response, Inc., |
436,313 |
|
437,949 |
||||
|
Independent Vetcare, |
GBP |
215,000 |
|
286,354 |
|||
|
IVC Acquisition, |
350,000 |
|
347,958 |
||||
|
IVI America LLC, |
540,416 |
|
541,881 |
||||
|
Schoen Klinik SE, |
EUR |
285,000 |
|
326,964 |
|||
|
Southern Veterinary Partners LLC, |
481,553 |
|
481,666 |
||||
|
Takecare Bidco SAS, |
EUR |
500,000 |
|
576,654 |
|||
|
US Renal Care, Inc., |
364,087 |
|
358,957 |
||||
|
VetStrategy Canada Holdings, Inc., |
782,131 |
|
777,567 |
||||
|
|
7,619,695 |
||||||
|
Health Care Technology – 0.8% |
|
||||||
|
AthenaHealth Group, Inc., |
719,624 |
|
713,058 |
||||
|
Cotiviti, Inc., |
394,975 |
|
362,267 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
19 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
PointClickCare Technologies, Inc., |
481,059 |
$ |
479,815 |
||||
|
Zelis Payments Buyer, Inc., |
599,703 |
|
586,398 |
||||
|
|
2,141,538 |
||||||
|
Hotels, Restaurants & Leisure – 1.0% |
|
||||||
|
Banijay, |
EUR |
500,000 |
|
573,977 |
|||
|
Casper Bidco SASU, |
EUR |
345,000 |
|
396,784 |
|||
|
Fertitta Entertainment LLC, |
174,091 |
|
174,110 |
||||
|
Flynn Restaurant Group LP, |
726,396 |
|
720,236 |
||||
|
Kingpin Intermediate Holdings LLC, |
732,250 |
|
640,902 |
||||
|
Tacala Investment Corp., |
358,570 |
|
359,330 |
||||
|
|
2,865,339 |
||||||
|
Household Durables – 0.2% |
|
||||||
|
Hunter Douglas, Inc., |
610,366 |
|
611,068 |
||||
|
Independent Power and Renewable Electricity Producers – 0.2% |
|
||||||
|
EFS Cogen Holdings I LLC, |
484,580 |
|
486,155 |
||||
|
Insurance – 1.0% |
|
||||||
|
Acrisure LLC, |
727,995 |
|
660,353 |
||||
|
Amynta Agency Borrower, Inc., |
838,674 |
|
828,891 |
||||
|
Asurion LLC, |
290,701 |
|
288,085 |
||||
|
Asurion LLC, |
287,474 |
|
287,504 |
||||
|
Asurion LLC, |
11,778 |
|
11,783 |
||||
____________
See Notes to Consolidated Financial Statements.
|
20 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Broadstreet Partners Group LLC, |
124,719 |
$ |
120,713 |
||||
|
CRC Insurance Group LLC, |
210,526 |
|
204,737 |
||||
|
Trucordia Insurance Holdings LLC, |
399,248 |
|
357,327 |
||||
|
|
2,759,393 |
||||||
|
Leisure Products – 0.2% |
|
||||||
|
Peloton Interactive, Inc., |
729,552 |
|
733,200 |
||||
|
Life Sciences Tools & Services – 0.4% |
|
||||||
|
PAREXEL International Corp., |
491,031 |
|
491,697 |
||||
|
Star Parent, Inc., |
652,115 |
|
653,728 |
||||
|
|
1,145,425 |
||||||
|
Machinery – 0.5% |
|
||||||
|
Delachaux Group SA, |
|
||||||
|
5.28% (3 mo. EURIBOR + 3.25%), 04/16/2029, (0.00% Floor) |
EUR |
11,434 |
|
13,208 |
|||
|
5.40% (3 mo. EURIBOR + 3.25%), 04/16/2029, (0.00% Floor) |
EUR |
209,075 |
|
241,516 |
|||
|
TK Elevator Midco GmbH, |
EUR |
460,000 |
|
528,879 |
|||
|
TK Elevator US Newco, Inc., |
248,750 |
|
250,111 |
||||
|
TSG Solutions Holding SAS, |
EUR |
300,000 |
|
344,921 |
|||
|
|
1,378,635 |
||||||
|
Media – 1.5% |
|
||||||
|
Century DE Buyer LLC, |
343,910 |
|
342,775 |
||||
|
Directv Financing LLC, |
648,452 |
|
652,914 |
||||
|
McGraw-Hill Education, Inc., |
426,732 |
|
429,220 |
||||
|
Nexstar Media, Inc., |
87,143 |
|
86,388 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
21 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
OverDrive, Inc., |
487,158 |
$ |
489,036 |
||||
|
Univision Communications, Inc., |
|
||||||
|
7.12% (1 mo. SOFR US + 3.25%), 01/31/2029, (0.75% Floor) |
590,745 |
|
588,826 |
||||
|
7.98% (3 mo. SOFR US + 4.25%), 06/25/2029, (0.50% Floor) |
482,412 |
|
482,653 |
||||
|
Virgin Media Bristol LLC, |
320,000 |
|
284,845 |
||||
|
WideOpenWest Finance LLC, |
470,431 |
|
431,032 |
||||
|
WideOpenWest Finance LLC, |
334,667 |
|
339,896 |
||||
|
|
4,127,585 |
||||||
|
Oil, Gas & Consumable Fuels – 0.7% |
|
||||||
|
Calcasieu Pass Funding LLC, |
500,000 |
|
502,050 |
||||
|
Freeport LNG Investments LLLP, |
850,000 |
|
852,656 |
||||
|
Traverse Midstream Partners LLC, |
498,782 |
|
500,340 |
||||
|
|
1,855,046 |
||||||
|
Personal Care Products – 0.2% |
|
||||||
|
ONE Development Corp., Inc., |
498,750 |
|
499,131 |
||||
|
|
499,131 |
||||||
|
Pharmaceuticals – 0.9% |
|
||||||
|
Althea Acquisition Bidco SARL, |
EUR |
550,000 |
|
631,570 |
|||
|
Curium Bidco Sarl, |
658,804 |
|
659,216 |
||||
|
Financiere Verdi I SASU, |
EUR |
433,139 |
|
500,626 |
|||
|
LSF12 Pillar Investments SARL, |
EUR |
415,000 |
|
476,124 |
|||
|
Pharmanovia Bidco Ltd., |
EUR |
300,000 |
|
229,449 |
|||
|
|
2,496,985 |
||||||
____________
See Notes to Consolidated Financial Statements.
|
22 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Professional Services – 1.6% |
|
||||||
|
Advantage Sales & Marketing, Inc., |
469,641 |
$ |
420,329 |
||||
|
Blackhawk Network Holdings, Inc., |
582,981 |
|
581,252 |
||||
|
Dayforce Bidco LLC, |
500,000 |
|
457,360 |
||||
|
DTI Holdco, Inc., |
246,127 |
|
224,960 |
||||
|
Eisner Advisory Group LLC, |
563,834 |
|
554,948 |
||||
|
Element Materials Technology Group US Holdings, Inc., |
766,210 |
|
771,317 |
||||
|
Grant Thornton Advisors LLC, |
390,557 |
|
372,617 |
||||
|
Planet US Buyer LLC, |
482,831 |
|
485,209 |
||||
|
Project Alpha Intermediate Holding, |
384,535 |
|
280,903 |
||||
|
Skopima Consilio Parent LLC, |
293,398 |
|
243,337 |
||||
|
|
4,392,232 |
||||||
|
|
|||||||
|
Software – 2.1% |
|
||||||
|
Avalara, Inc., |
720,600 |
|
691,776 |
||||
|
Boxer Parent Co., Inc., |
127,388 |
|
115,140 |
||||
|
Capstone Borrower, Inc., |
371,870 |
|
357,629 |
||||
|
Castle US Holding Corp., |
EUR |
216,674 |
|
110,788 |
|||
|
Cloud Software Group, Inc., |
278,581 |
|
245,151 |
||||
|
Hudson River Trading LLC, |
199,499 |
|
198,368 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
23 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Icon Parent, Inc., |
267,135 |
$ |
250,480 |
||||
|
Kaseya, Inc., |
470,150 |
|
365,932 |
||||
|
McAfee Corp., |
EUR |
489,443 |
|
517,917 |
|||
|
McAfee Corp., |
333,190 |
|
297,039 |
||||
|
Mitchell International, Inc., |
603,291 |
|
576,034 |
||||
|
Mitchell International, Inc., |
310,000 |
|
286,285 |
||||
|
Polaris Newco LLC, |
EUR |
238,125 |
|
236,427 |
|||
|
Proofpoint, Inc., |
685,662 |
|
663,233 |
||||
|
UKG, Inc., |
756,158 |
|
713,881 |
||||
|
Zodiac Purchaser LLC, |
238,200 |
|
219,144 |
||||
|
|
5,845,224 |
||||||
|
Specialty Retail – 0.8% |
|
||||||
|
EG America LLC, |
605,000 |
|
607,931 |
||||
|
LS Group OpCo Acquistion LLC, |
338,937 |
|
338,190 |
||||
|
Motor Fuel Group, |
GBP |
350,000 |
|
466,536 |
|||
|
Motor Fuel Group, |
GBP |
150,000 |
|
199,944 |
|||
|
PetSmart LLC, |
266,133 |
|
266,189 |
||||
|
Wand NewCo 3, Inc., |
311,808 |
|
311,808 |
||||
|
|
2,190,598 |
||||||
____________
See Notes to Consolidated Financial Statements.
|
24 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Trading Companies & Distributors – 0.2% |
|
||||||
|
Renta Group, |
EUR |
500,000 |
$ |
573,797 |
|||
|
Total Senior Loans (Syndicated) |
|
72,815,560 |
|||||
|
High Yield – 21.7% (a) |
|
||||||
|
Automobile Components – 0.3% |
|
||||||
|
Dorman Products, Inc., |
275,000 |
|
278,503 |
||||
|
Goodyear Tire & Rubber Co., |
275,000 |
|
277,569 |
||||
|
IHO Verwaltungs GmbH, |
EUR |
305,000 |
|
373,325 |
|||
|
|
929,397 |
||||||
|
Automobiles – 0.6% |
|
||||||
|
JB Poindexter & Company, Inc., |
730,000 |
|
751,444 |
||||
|
Nissan Motor Co. Ltd. |
|
||||||
|
7.50%, 07/17/2030 (d) |
290,000 |
|
299,141 |
||||
|
8.13%, 07/17/2035 (d) |
580,000 |
|
614,487 |
||||
|
|
1,665,072 |
||||||
|
Broadline Retail – 0.3% |
|
||||||
|
B&M European Value Retail PLC, |
GBP |
295,000 |
|
386,044 |
|||
|
QVC, Inc., |
1,163,000 |
|
569,870 |
||||
|
|
955,914 |
||||||
|
Building Products – 0.1% |
|
||||||
|
LBM Acquisition LLC, |
395,000 |
|
287,438 |
||||
|
Capital Markets – 0.1% |
|
||||||
|
Osaic Holdings, Inc. |
|
||||||
|
6.75%, 08/01/2032 (d) |
15,000 |
|
15,034 |
||||
|
8.00%, 08/01/2033 (d) |
350,000 |
|
351,554 |
||||
|
|
366,588 |
||||||
|
Chemicals – 0.9% |
|
||||||
|
INEOS Finance PLC, |
EUR |
200,000 |
|
225,499 |
|||
|
INEOS Quattro Finance 2 PLC, |
EUR |
335,000 |
|
322,936 |
|||
|
Nouryon Finance BV, |
EUR |
116,000 |
|
134,756 |
|||
|
Nufarm Australia Ltd., |
820,000 |
|
783,491 |
||||
|
Olympus Water US Holding Corp., |
EUR |
154,000 |
|
177,198 |
|||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
25 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Perimeter Holdings LLC, |
760,000 |
$ |
759,070 |
||||
|
Windsor Holdings III LLC, |
2,000 |
|
2,084 |
||||
|
|
2,405,034 |
||||||
|
Commercial Services & Supplies – 1.0% |
|
||||||
|
Allied Universal Holdco LLC, |
900,000 |
|
941,327 |
||||
|
Garda World Security Corp., |
445,000 |
|
455,691 |
||||
|
Iron Mountain, Inc., |
135,000 |
|
135,695 |
||||
|
Luna 2 5SARL, |
EUR |
400,000 |
|
464,860 |
|||
|
TMS International Corp., |
640,000 |
|
640,889 |
||||
|
|
2,638,462 |
||||||
|
Consumer Finance – 1.1% |
|
||||||
|
FirstCash, Inc., |
590,000 |
|
587,595 |
||||
|
goeasy Ltd. |
|
||||||
|
6.88%, 05/15/2030 (d) |
275,000 |
|
244,984 |
||||
|
7.38%, 10/01/2030 (d) |
190,000 |
|
171,279 |
||||
|
Kona Spc Ltd., |
2,000,000 |
|
1,998,200 |
||||
|
|
3,002,058 |
||||||
|
Consumer Staples Distribution & Retail – 0.3% |
|
||||||
|
Boots Group Finco LP, |
EUR |
320,000 |
|
376,289 |
|||
|
Eroski S Coop, |
EUR |
267,000 |
|
318,275 |
|||
|
|
694,564 |
||||||
|
Containers & Packaging – 0.5% |
|
||||||
|
Guala Closures SpA, |
EUR |
250,000 |
|
288,566 |
|||
|
Owens-Brockway Glass Container, Inc., |
570,000 |
|
584,324 |
||||
|
Sword Purchaser LLC, |
445,000 |
|
460,727 |
||||
|
|
1,333,617 |
||||||
|
Distributors – 0.1% |
|
||||||
|
CT Investment GmbH, |
EUR |
123,000 |
|
144,875 |
|||
____________
See Notes to Consolidated Financial Statements.
|
26 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Diversified Consumer Services – 0.2% |
|
||||||
|
Aegis Lux 1a Sarl, |
EUR |
394,000 |
$ |
458,077 |
|||
|
Diversified Telecommunication Services – 0.8% |
|
||||||
|
Cogent Communications Group LLC, |
151,000 |
|
136,051 |
||||
|
eircom Finance DAC, |
EUR |
363,000 |
|
420,595 |
|||
|
Level 3 Financing, Inc. |
|
||||||
|
7.00%, 03/31/2034 (d) |
415,000 |
|
428,208 |
||||
|
8.50%, 01/15/2036 (d) |
160,000 |
|
171,941 |
||||
|
7.50%, 02/15/2037 (d) |
440,000 |
|
452,003 |
||||
|
Telefonica Europe BV, |
EUR |
300,000 |
|
377,408 |
|||
|
Zayo Group Holdings, Inc., |
184,864 |
|
184,793 |
||||
|
|
2,170,999 |
||||||
|
Electric Utilities – 0.2% |
|
||||||
|
VoltaGrid LLC, |
645,000 |
|
669,933 |
||||
|
Electrical Equipment – 0.1% |
|
||||||
|
Cyprium Corp., |
215,000 |
|
215,108 |
||||
|
Energy Equipment & Services – 0.2% |
|
||||||
|
Kraken Oil & Gas Partners LLC, |
145,000 |
|
141,874 |
||||
|
Oceaneering International, Inc., |
275,000 |
|
279,488 |
||||
|
|
421,362 |
||||||
|
Entertainment – 0.4% |
|
||||||
|
Discovery Global Holdings, Inc., |
435,000 |
|
319,212 |
||||
|
OAK-Eagle Acquireco, Inc. |
|
||||||
|
7.21% (1 mo. Term SOFR + 3.50%), 03/24/2033 |
500,000 |
|
501,795 |
||||
|
6.25%, 07/01/2033 |
EUR |
322,000 |
|
386,151 |
|||
|
|
1,207,158 |
||||||
|
Financial Services – 0.4% |
|
||||||
|
CrossCountry Intermediate HoldCo LLC, |
305,000 |
|
294,750 |
||||
|
PennyMac Financial Services, Inc., |
300,000 |
|
292,738 |
||||
|
Rocket Cos., Inc., |
135,000 |
|
137,976 |
||||
|
Stonebriar ABF Issuer LLC, |
430,000 |
|
449,886 |
||||
|
|
1,175,350 |
||||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
27 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Food Products – 1.0% |
|
||||||
|
Fiesta Purchaser, Inc. |
|
||||||
|
7.88%, 03/01/2031 (d) |
585,000 |
$ |
590,494 |
||||
|
9.63%, 09/15/2032 (d) |
290,000 |
|
284,795 |
||||
|
Flora Food Management BV, |
EUR |
160,000 |
|
178,840 |
|||
|
Froneri Lux FinCo SARL, |
EUR |
416,000 |
|
464,358 |
|||
|
Irca SpA, |
EUR |
500,000 |
|
576,140 |
|||
|
Roquette Freres SA, |
EUR |
300,000 |
|
347,862 |
|||
|
Sammontana Italia SpA, |
EUR |
175,000 |
|
201,714 |
|||
|
Viking Baked Goods Acquisition Corp., |
135,000 |
|
136,796 |
||||
|
|
2,780,999 |
||||||
|
Health Care Providers & Services – 1.5% |
|
||||||
|
Acadia Healthcare Co., Inc., |
923,000 |
|
951,311 |
||||
|
Community Health Systems, Inc. |
|
||||||
|
10.88%, 01/15/2032 (d) |
228,000 |
|
245,828 |
||||
|
9.75%, 01/15/2034 (d) |
480,000 |
|
501,759 |
||||
|
LifePoint Health, Inc., |
705,000 |
|
734,728 |
||||
|
Mehilainen Yhtiot Oy, |
EUR |
410,000 |
|
473,756 |
|||
|
Nidda Healthcare Holding GmbH |
|
||||||
|
5.38%, 10/23/2030 |
EUR |
397,000 |
|
457,546 |
|||
|
5.70% (3 mo. EURIBOR + 3.50%), 12/09/2032 |
EUR |
420,000 |
|
481,743 |
|||
|
RAY Financing LLC, |
EUR |
395,000 |
|
456,268 |
|||
|
|
4,302,939 |
||||||
|
Health Care REITs – 0.2% |
|
||||||
|
MPT Operating Partnership LP |
|
||||||
|
5.00%, 10/15/2027 |
150,000 |
|
145,588 |
||||
|
4.63%, 08/01/2029 |
185,000 |
|
148,846 |
||||
|
8.50%, 02/15/2032 (d) |
340,000 |
|
348,327 |
||||
|
|
642,761 |
||||||
|
Hotel & Resort REITs – 0.3% |
|
||||||
|
Service Properties Trust, |
745,000 |
|
785,159 |
||||
____________
See Notes to Consolidated Financial Statements.
|
28 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Hotels, Restaurants & Leisure – 2.5% |
|
||||||
|
Betclic Everest Group SAS, |
EUR |
387,000 |
$ |
449,929 |
|||
|
Bloomin’ Brands, Inc., |
790,000 |
|
753,429 |
||||
|
Cirsa Finance International Sarl, |
EUR |
192,000 |
|
223,527 |
|||
|
CPUK Finance Ltd., |
GBP |
229,000 |
|
306,799 |
|||
|
Gaia Purchaser, Inc., |
555,000 |
|
561,709 |
||||
|
Hilton Grand Vacations Borrower LLC, |
805,000 |
|
757,087 |
||||
|
LHMC Finco 2 Sarl, |
EUR |
104,766 |
|
123,526 |
|||
|
Lottomatica Group SpA, |
EUR |
102,000 |
|
117,427 |
|||
|
Marriott Ownership Resorts, Inc., |
945,000 |
|
939,731 |
||||
|
Motel One GmbH, |
EUR |
368,000 |
|
448,553 |
|||
|
NCL Corp. Ltd., |
465,000 |
|
451,870 |
||||
|
Sani/Ikos Financial Holdings, |
EUR |
325,000 |
|
385,835 |
|||
|
Six Flags Entertainment Corp, |
920,000 |
|
915,147 |
||||
|
TUI Cruises GmbH |
|
||||||
|
6.25%, 04/15/2029 |
EUR |
285,000 |
|
336,057 |
|||
|
5.00%, 05/15/2030 |
EUR |
100,000 |
|
116,104 |
|||
|
|
6,886,730 |
||||||
|
Household Durables – 0.2% |
|
||||||
|
Weekley Homes LLC, |
345,000 |
|
346,349 |
||||
|
Whirlpool Corp. |
|
||||||
|
4.75%, 02/26/2029 |
83,000 |
|
77,521 |
||||
|
7.50%, 07/01/2031 (d) |
185,000 |
|
187,673 |
||||
|
|
611,543 |
||||||
|
Independent Power and Renewable Electricity Producers – 0.4% |
|
||||||
|
California Buyer Ltd., |
EUR |
372,000 |
|
432,766 |
|||
|
Talen Energy Supply LLC, |
440,000 |
|
440,191 |
||||
|
XPLR Infrastructure Operating Partners LP, |
305,000 |
|
321,205 |
||||
|
|
1,194,162 |
||||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
29 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Insurance – 0.4% |
|
||||||
|
Ardonagh Finco Ltd, |
EUR |
390,000 |
$ |
450,192 |
|||
|
Asurion LLC, |
450,000 |
|
453,767 |
||||
|
Howden UK Refinance PLC, |
216,000 |
|
209,397 |
||||
|
Panther Escrow Issuer LLC, |
65,000 |
|
64,831 |
||||
|
|
1,178,187 |
||||||
|
Life Sciences Tools & Services – 0.1% |
|
||||||
|
Eurofins Scientific SE, |
EUR |
320,000 |
|
385,119 |
|||
|
Machinery – 0.1% |
|
||||||
|
Columbus McKinnon Corp., |
50,000 |
|
50,146 |
||||
|
IMA Industria Macchine Automatiche SpA, |
EUR |
220,000 |
|
255,090 |
|||
|
|
305,236 |
||||||
|
Media – 1.5% |
|
||||||
|
AMC Networks, Inc., |
272,000 |
|
279,772 |
||||
|
Block Communications, Inc., |
285,000 |
|
260,906 |
||||
|
CCO Holdings LLC |
|
||||||
|
7.38%, 03/01/2031 (d) |
290,000 |
|
290,893 |
||||
|
7.00%, 02/01/2033 (d) |
510,000 |
|
500,573 |
||||
|
4.50%, 06/01/2033 (d) |
324,000 |
|
281,357 |
||||
|
CSC Holdings LLC, |
365,000 |
|
244,864 |
||||
|
Gray Media, Inc. |
|
||||||
|
9.63%, 07/15/2032 (d) |
310,000 |
|
299,469 |
||||
|
7.25%, 08/15/2033 (d) |
595,000 |
|
586,401 |
||||
|
Nexstar Media, Inc. |
|
||||||
|
6.50%, 09/15/2033 (d) |
220,000 |
|
220,132 |
||||
|
7.25%, 04/15/2034 (d) |
70,000 |
|
69,891 |
||||
|
Univision Communications, Inc. |
|
||||||
|
7.38%, 06/30/2030 (d) |
605,000 |
|
607,134 |
||||
|
9.38%, 08/01/2032 (d) |
145,000 |
|
147,444 |
||||
|
Virgin Media Financing PLC, |
EUR |
235,000 |
|
236,665 |
|||
|
Virgin Media Secured Finance PLC, |
GBP |
140,000 |
|
177,943 |
|||
|
|
4,203,444 |
||||||
____________
See Notes to Consolidated Financial Statements.
|
30 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Oil, Gas & Consumable Fuels – 0.8% |
|
||||||
|
Comstock Resources, Inc., |
635,000 |
$ |
623,860 |
||||
|
CVR Energy, Inc., |
150,000 |
|
149,395 |
||||
|
Northern Oil & Gas, Inc., |
630,000 |
|
626,434 |
||||
|
Venture Global LNG, Inc. |
|
||||||
|
8.38%, 06/01/2031 (d) |
97,000 |
|
101,006 |
||||
|
6.38%, 12/15/2034 (d) |
365,000 |
|
358,924 |
||||
|
Venture Global Plaquemines LNG LLC |
|
||||||
|
6.50%, 06/15/2034 (d) |
225,000 |
|
234,512 |
||||
|
6.75%, 01/15/2036 (d) |
245,000 |
|
259,891 |
||||
|
|
2,354,022 |
||||||
|
Paper & Forest Products – 0.2% |
|
||||||
|
WEPA Hygieneprodukte GmbH, |
EUR |
437,000 |
|
489,388 |
|||
|
Passenger Airlines – 0.6% |
|
||||||
|
Spirit Airlines Pass Through Trust, |
1,861,735 |
|
1,582,475 |
||||
|
Personal Care Products – 0.4% |
|
||||||
|
BellRing Brands, Inc., |
715,000 |
|
715,409 |
||||
|
Opal Bidco SAS, |
EUR |
435,000 |
|
514,165 |
|||
|
|
1,229,574 |
||||||
|
Pharmaceuticals – 1.0% |
|
||||||
|
1261229 BC Ltd., |
930,000 |
|
942,560 |
||||
|
Cheplapharm Arzneimittel GmbH |
|
||||||
|
7.03% (3 mo. EURIBOR + 4.75%), 05/15/2030, (0.00% Floor) (d) |
EUR |
210,000 |
|
242,648 |
|||
|
7.50%, 05/15/2030 |
EUR |
300,000 |
|
355,733 |
|||
|
Dolcetto Holdco SpA, |
EUR |
395,000 |
|
455,436 |
|||
|
LSF12 Pillar Investments US, Inc., |
EUR |
500,000 |
|
568,591 |
|||
|
Neopharmed Gentili SPA, |
EUR |
155,000 |
|
179,330 |
|||
|
|
2,744,298 |
||||||
|
Professional Services – 0.1% |
|
||||||
|
TriNet Group, Inc., |
145,000 |
|
145,926 |
||||
|
Real Estate Management & Development – 0.2% |
|
||||||
|
Anywhere Real Estate Group LLC |
|
||||||
|
5.25%, 04/15/2030 (d) |
335,000 |
|
323,520 |
||||
|
7.00%, 04/15/2030 (d) |
335,000 |
|
338,798 |
||||
|
|
662,318 |
||||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
31 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
CORPORATE CREDIT (continued) |
|
||||||
|
Software – 0.8% |
|
||||||
|
Cedacri SpA, |
EUR |
200,000 |
$ |
221,737 |
|||
|
Cloud Software Group, Inc., |
469,000 |
|
455,409 |
||||
|
Dye & Durham Ltd., |
410,000 |
|
287,701 |
||||
|
Fair Isaac Corp., |
300,000 |
|
295,678 |
||||
|
Rocket Software, Inc. |
|
||||||
|
9.00%, 11/28/2028 (d) |
205,000 |
|
203,948 |
||||
|
6.50%, 02/15/2029 (d) |
240,000 |
|
216,311 |
||||
|
TeamSystem SpA, |
EUR |
500,000 |
|
562,439 |
|||
|
|
2,243,223 |
||||||
|
Specialty Retail – 0.8% |
|
||||||
|
Advance Auto Parts, Inc. |
|
||||||
|
7.00%, 08/01/2030 (d) |
315,000 |
|
323,178 |
||||
|
7.38%, 08/01/2033 (d) |
470,000 |
|
487,453 |
||||
|
CD&R Firefly Bidco, |
GBP |
279,000 |
|
381,696 |
|||
|
PetSmart LLC, |
644,000 |
|
644,604 |
||||
|
Wand NewCo 3, Inc., |
280,000 |
|
289,758 |
||||
|
|
2,126,689 |
||||||
|
Textiles, Apparel & Luxury Goods – 0.2% |
|
||||||
|
Beach Acquisition Bidco LLC, |
EUR |
357,000 |
|
415,987 |
|||
|
Trading Companies & Distributors – 0.5% |
|
||||||
|
Equipmentshare.Com Inc., |
992,000 |
|
1,016,373 |
||||
|
Kapla Holding SAS, |
EUR |
385,000 |
|
443,398 |
|||
|
|
1,459,771 |
||||||
|
Transportation Infrastructure – 0.3% |
|
||||||
|
Arena Luxembourg Finance Sarl, |
EUR |
336,000 |
|
387,239 |
|||
|
Heathrow Finance PLC, |
GBP |
350,000 |
|
465,683 |
|||
|
|
852,922 |
||||||
|
Total High Yield |
|
60,323,878 |
|||||
|
Investment Grade Bonds – 0.1% |
|
||||||
|
Chemicals – 0.1% |
|
||||||
|
FMC Corp., |
265,000 |
|
275,995 |
||||
|
TOTAL CORPORATE CREDIT |
|
133,415,433 |
|||||
____________
See Notes to Consolidated Financial Statements.
|
32 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
STRUCTURED CREDIT – 31.0% |
|
||||||
|
Collateralized Loan Obligations – 11.1% |
|
||||||
|
Adagio CLO, |
EUR |
1,000,000 |
$ |
1,113,605 |
|||
|
Anchorage Credit Funding Ltd., |
1,000,000 |
|
40,018 |
||||
|
Ares European CLO, |
EUR |
1,000,000 |
|
1,127,356 |
|||
|
Birch Grove CLO, |
1,000,000 |
|
942,450 |
||||
|
Carlyle Global Market Strategies, |
1,000,000 |
|
1,002,632 |
||||
|
CBAM Ltd., |
1,300,000 |
|
1,297,337 |
||||
|
Dryden CLO, |
EUR |
500,000 |
|
565,600 |
|||
|
Elmwood CLO Ltd., |
1,750,000 |
|
1,752,980 |
||||
|
Fortress Credit BSL Ltd., |
1,000,000 |
|
995,848 |
||||
|
Gallatin CLO Ltd., |
1,000,000 |
|
1,003,416 |
||||
|
Halsey Point CLO Ltd., |
1,000,000 |
|
948,766 |
||||
|
Harvest CLO, |
EUR |
500,000 |
|
573,167 |
|||
|
ICG US CLO Ltd. |
1,000,000 |
|
988,095 |
||||
|
Series 2020-1A, Class ER, |
1,000,000 |
|
904,217 |
||||
|
Kennedy Lewis CLO Ltd., |
1,200,000 |
|
1,179,869 |
||||
|
Marble Point CLO, |
1,750,000 |
|
1,567,139 |
||||
|
Monroe Capital CLO Ltd., |
1,000,000 |
|
974,687 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
33 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
STRUCTURED CREDIT (continued) |
|
||||||
|
Mountain View CLO Ltd., |
1,000,000 |
$ |
1,005,507 |
||||
|
Oak Hill European Credit Partners |
|
||||||
|
Series 2016-5A, Class ER, |
EUR |
1,750,000 |
|
2,030,464 |
|||
|
Series 2016-5A, Class FR, |
EUR |
1,000,000 |
|
1,147,843 |
|||
|
Octagon Investment Partners Ltd., |
1,000,000 |
|
997,757 |
||||
|
Rockford Tower Europe CLO, |
EUR |
500,000 |
|
578,945 |
|||
|
Symphony CLO Ltd., |
438,000 |
|
370,503 |
||||
|
TCW CLO Ltd. |
|
||||||
|
Series 2019-2A, Class ER2, |
1,250,000 |
|
1,153,239 |
||||
|
Series 2021-1A, Class ER1, |
1,000,000 |
|
912,124 |
||||
|
Toro European CLO, |
EUR |
1,500,000 |
|
1,645,281 |
|||
|
Trinitas CLO Ltd. |
|
||||||
|
Series 2021-18A, Class D, |
2,000,000 |
|
1,974,228 |
||||
|
Series 2022-21A, Class ER, |
1,000,000 |
|
965,840 |
||||
|
Wind River CLO Ltd., |
|
1,000,000 |
|
1,001,076 |
|||
|
Total Collateralized Loan Obligations |
|
|
|
30,759,989 |
|||
|
Asset-Backed Securities – 9.7% |
|
||||||
|
Financials – 8.6% |
|
||||||
|
Adams Outdoor Advertising LP, |
2,000,000 |
|
2,040,836 |
||||
|
Avis Budget Car Rental LLC |
|
||||||
|
Series 2026-1A, Class D, |
360,000 |
|
356,349 |
||||
|
Series 2026-2A, Class D, |
150,000 |
|
148,122 |
||||
|
BUTTERCUP LLC, |
1,344,371 |
|
1,345,043 |
||||
|
CPS Auto Trust, |
1,000,000 |
|
1,014,815 |
||||
____________
See Notes to Consolidated Financial Statements.
|
34 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
STRUCTURED CREDIT (continued) |
|
||||||
|
EnFin Residential Solar Receivables Trust, |
497,137 |
$ |
441,141 |
||||
|
Firstlight Issuer LLC, |
685,000 |
|
689,138 |
||||
|
Helios Issuer LLC, |
901,444 |
|
813,362 |
||||
|
Hertz Corp. |
|
||||||
|
Series 2023-4A, Class D, |
1,000,000 |
|
1,039,729 |
||||
|
Series 2024-2A, Class D, |
1,000,000 |
|
1,039,252 |
||||
|
Horizon Aircraft Finance Ltd. |
|
||||||
|
Series 2018-1, Class A, |
272,485 |
|
271,477 |
||||
|
Series 2019-2, Class A, |
544,721 |
|
530,885 |
||||
|
Lunar Aircraft Ltd., |
14,883 |
|
14,859 |
||||
|
METAL Ltd. |
|
||||||
|
Series 2017-1, Class A, |
1,200,042 |
|
845,910 |
||||
|
Series 2017-1, Class B, |
284,797 |
|
59,779 |
||||
|
Metronet Systems Holdings LLC, |
535,000 |
|
537,111 |
||||
|
Mosaic Solar Loan Trust, |
1,500,000 |
|
817,141 |
||||
|
PAR Issuer Trust, |
500,000 |
|
499,951 |
||||
|
PMCIT |
|
||||||
|
Series 2024-1, |
513,000 |
|
511,820 |
||||
|
Series 2024-1, |
685,000 |
|
685,000 |
||||
|
Series 2024-1, |
491,000 |
|
491,295 |
||||
|
Sabal Issuer LLC, |
993,086 |
|
970,861 |
||||
|
SEB Funding LLC, |
455,000 |
|
445,782 |
||||
|
Sunnova Energy International, Inc., |
881,802 |
|
823,267 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
35 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
STRUCTURED CREDIT (continued) |
|
||||||
|
Thunderbolt Aircraft Lease, |
32,194 |
$ |
32,455 |
||||
|
Uniti Group LP, |
2,250,000 |
|
2,359,507 |
||||
|
VistaJet Pass Through Trust, |
578,571 |
|
574,955 |
||||
|
WAVE USA, |
2,225,809 |
|
1,928,441 |
||||
|
Zayo Group LLC, |
2,700,000 |
|
2,787,917 |
||||
|
|
24,116,200 |
||||||
|
Ground Transportation – 1.1% |
|
||||||
|
Hertz Vehicle Financing III, |
|
3,000,000 |
|
2,984,700 |
|||
|
Total Asset-Backed Securities |
|
|
|
27,100,900 |
|||
|
Residential Mortgage-Backed Securities – 4.9% |
|
||||||
|
ACRA Trust |
|
||||||
|
Series 2024-NQM1, Class B1, |
110,000 |
|
111,022 |
||||
|
Series 2024-NQM1, Class M1B, |
200,000 |
|
200,089 |
||||
|
Angel Oak Mortgage Trust LLC, |
125,000 |
|
125,318 |
||||
|
Bellemeade Re Ltd., |
161,000 |
|
163,061 |
||||
|
BRAVO Residential Funding Trust, |
128,000 |
|
129,108 |
||||
|
Builder Circle Mortgage Trust |
|
||||||
|
Series 2026-RTL1, Class A2, |
301,000 |
|
300,453 |
||||
|
Series 2026-RTL1, Class M, |
727,000 |
|
728,351 |
||||
|
CFST Mortgage Trust, |
300,000 |
|
301,394 |
||||
|
COLT Funding LLC, |
363,000 |
|
370,093 |
||||
|
Credit Suisse Mortgage Capital Certificates, |
159,000 |
|
139,974 |
||||
____________
See Notes to Consolidated Financial Statements.
|
36 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
STRUCTURED CREDIT (continued) |
|
||||||
|
Deephaven Residential Mortgage Trust |
|
||||||
|
Series 2022-2, Class B1, |
229,000 |
$ |
190,919 |
||||
|
Series 2026-INV1, Class A3, |
138,745 |
|
137,121 |
||||
|
FCC Home Improvement Trust, |
622,000 |
|
618,307 |
||||
|
Fidelis Mortgage Trust |
|
||||||
|
Series 2026-RTL1, Class B, |
397,000 |
|
393,926 |
||||
|
Series 2026-RTL1, Class M1, |
156,000 |
|
154,940 |
||||
|
Freddie Mac Seasoned Credit Risk Transfer Trust, |
525,614 |
|
507,673 |
||||
|
GCAT |
|
||||||
|
Series 2022-NQM1, Class B1, |
476,000 |
|
366,958 |
||||
|
Series 2023-NQM2, Class B2, |
279,000 |
|
276,707 |
||||
|
GS Mortgage-Backed Securities Trust, |
192,000 |
|
194,354 |
||||
|
Imperial Fund Mortgage Trust, |
332,000 |
|
283,915 |
||||
|
JP Morgan Mortgage Trust |
|
||||||
|
Series 2022-DSC1, Class B2, |
433,000 |
|
365,861 |
||||
|
Series 2023-DSC1, Class B1, |
292,000 |
|
251,883 |
||||
|
Series 2023-DSC1, Class B2, |
280,000 |
|
225,248 |
||||
|
Series 2023-DSC2, Class B1, |
568,000 |
|
542,792 |
||||
|
Series 2024-CES1, Class B1, |
100,000 |
|
100,435 |
||||
|
Series 2025-CES5, Class B1, |
195,000 |
|
193,309 |
||||
|
Series 2026-ACES1, Class B1, |
1,514,000 |
|
1,503,050 |
||||
|
Series 2026-ACES1, Class B2, |
549,000 |
|
542,084 |
||||
|
Knock Issuer Trust, |
224,000 |
|
225,160 |
||||
|
Magen Capital Group Trust, |
269,000 |
|
268,577 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
37 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
STRUCTURED CREDIT (continued) |
|
||||||
|
Mello Mortgage Capital Acceptance, |
205,520 |
$ |
173,747 |
||||
|
MFA Trust, |
251,000 |
|
206,545 |
||||
|
New Residential Mortgage Loan Trust, |
160,000 |
|
159,983 |
||||
|
PRKCM Trust |
|
||||||
|
Series 2021-AFC1, Class B1, |
278,000 |
|
205,813 |
||||
|
Series 2022-AFC2, Class B1, |
204,000 |
|
203,008 |
||||
|
Series 2023-AFC2, Class B1, |
100,000 |
|
100,604 |
||||
|
Series 2023-AFC4, Class B1, |
293,000 |
|
292,583 |
||||
|
Series 2024-AFC1, Class B1, |
176,000 |
|
176,525 |
||||
|
RCKT Mortgage Trust |
|
||||||
|
Series 2024-CES1, Class M2, |
100,000 |
|
100,156 |
||||
|
Series 2024-CES2, Class M2, |
100,000 |
|
100,268 |
||||
|
Series 2024-CES6, Class B2, |
140,000 |
|
139,608 |
||||
|
RCO Mortgage LLC, |
277,000 |
|
279,023 |
||||
|
Seasoned Credit Risk Transfer Trust, |
226,000 |
|
205,200 |
||||
|
Starwood Mortgage Residential Trust, |
210,000 |
|
166,333 |
||||
|
Toorak Mortgage Trust, |
71,000 |
|
71,098 |
||||
|
TVC Mortgage Trust, |
295,000 |
|
295,150 |
||||
|
Western Alliance Bancorp, |
|
690,979 |
|
758,210 |
|||
|
Total Residential Mortgage-Backed Securities |
|
|
|
13,545,936 |
|||
____________
See Notes to Consolidated Financial Statements.
|
38 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
STRUCTURED CREDIT (continued) |
|
||||||
|
Commercial Mortgage-Backed Securities – 4.6% |
|
||||||
|
Arbor Realty Collateralized Loan Obligation Ltd., |
905,000 |
$ |
907,776 |
||||
|
Banc of America Merrill Lynch Commercial Mortgage, Inc., |
10,000,000 |
|
1,370 |
||||
|
Benchmark Mortgage Trust, |
36,000 |
|
31,947 |
||||
|
BSPRT, |
278,000 |
|
276,539 |
||||
|
BX Trust |
|
||||||
|
Series 2019-IMC, Class G, |
1,131,000 |
|
1,037,868 |
||||
|
Series 2025-OMG, Class F, |
251,000 |
|
252,254 |
||||
|
Caister Finance DAC |
|
||||||
|
Series 1A, Class D, |
GBP |
481,000 |
|
640,186 |
|||
|
Series 1A, Class E, |
GBP |
993,000 |
|
1,315,146 |
|||
|
CD Mortgage Trust, |
489,000 |
|
461,592 |
||||
|
COMM Mortgage Trust, |
11,810,741 |
|
1,772 |
||||
|
CSAIL Commercial Mortgage Trust, |
190,000 |
|
145,627 |
||||
|
DBGS Mortgage Trust, |
1,000,000 |
|
997,710 |
||||
|
Extended Stay America Trust |
|
||||||
|
Series 2025-ESH, Class E, |
187,811 |
|
188,467 |
||||
|
Series 2025-ESH, Class F, |
139,654 |
|
140,142 |
||||
|
Franklin BSP Realty Trust, Inc., |
410,000 |
|
409,624 |
||||
|
FS RIALTO, |
187,000 |
|
185,574 |
||||
|
GS Mortgage Securities Corp. II, |
138,625 |
|
138,261 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
39 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
STRUCTURED CREDIT (continued) |
|
||||||
|
GS REFT Ltd., |
115,000 |
$ |
114,910 |
||||
|
HAVN Trust, |
651,000 |
|
649,872 |
||||
|
Hilton USA Trust |
|
||||||
|
Series 2016-SFP, Class C, |
105,000 |
|
34,277 |
||||
|
Series 2016-SFP, Class D, |
584,000 |
|
584 |
||||
|
Life Mortgage Trust, |
89,600 |
|
80,255 |
||||
|
Natixis Commercial Mortgage Securities Trust, |
493,500 |
|
493,551 |
||||
|
PRM Trust, |
222,000 |
|
219,171 |
||||
|
SLG Office Trust, |
721,000 |
|
721,336 |
||||
|
UK Logistics |
|
||||||
|
Series 2024-1A, Class D, |
GBP |
57,514 |
|
76,405 |
|||
|
Series 2024-1A, Class E, |
GBP |
112,773 |
|
149,813 |
|||
|
Series 2025-1A, Class E, |
GBP |
252,166 |
|
335,322 |
|||
|
Series 2025-2A, Class E, |
GBP |
274,495 |
|
361,575 |
|||
|
VMC Finance LLC |
|
||||||
|
Series 2021-FL4, Class C, |
689,949 |
|
680,999 |
||||
|
Series 2021-FL4, Class D, |
147,000 |
|
144,912 |
||||
|
Wells Fargo Commercial Mortgage Trust, |
874,000 |
|
658,836 |
||||
|
WHARF Trust, |
|
867,000 |
|
867,927 |
|||
|
Total Commercial Mortgage-Backed Securities |
|
|
|
12,721,600 |
|||
|
High Yield – 0.7% (a) |
|
||||||
|
Financial Services – 0.7% |
|
||||||
|
Mexico Remittances Funding Fiduciary Estate Management Sarl, |
|
1,850,000 |
|
1,997,075 |
|||
|
TOTAL STRUCTURED CREDIT |
|
|
|
86,125,500 |
|||
____________
See Notes to Consolidated Financial Statements.
|
40 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
|||||
|
EMERGING MARKETS – 4.5% |
|
||||||
|
High Yield – 4.5% (a) |
|
||||||
|
Banks – 0.2% |
|
||||||
|
Banco Mercantil del Norte SA |
|
||||||
|
8.38% to 05/20/2031 then 5 yr. CMT Rate + 4.07%, Perpetual |
235,000 |
$ |
240,933 |
||||
|
8.00% to 01/24/2033 then 5 yr. CMT Rate + 3.73%, Perpetual (d) |
275,000 |
|
275,619 |
||||
|
|
516,552 |
||||||
|
Building Products – 0.1% |
|
||||||
|
Limak Cimento Sanayi ve Ticaret AS, |
250,000 |
|
252,902 |
||||
|
Capital Markets – 0.2% |
|
||||||
|
J&F LUXEMBOURG FINANCE SARL, |
612,000 |
|
586,564 |
||||
|
Chemicals – 0.1% |
|
||||||
|
Dangote Fertiliser Ltd., |
400,000 |
|
402,626 |
||||
|
Diversified Telecommunication Services – 0.2% |
|
||||||
|
Telecom Argentina SA |
|
||||||
|
9.25%, 05/28/2033 (d) |
260,000 |
|
277,744 |
||||
|
8.50%, 01/20/2036 (d) |
153,000 |
|
160,257 |
||||
|
|
438,001 |
||||||
|
Financial Services – 0.1% |
|
||||||
|
MC Brazil Downstream Trading SARL, |
406,870 |
|
382,238 |
||||
|
Food Products – 0.4% |
|
||||||
|
Grupo Nutresa SA, |
907,000 |
|
1,009,718 |
||||
|
Metals & Mining – 1.6% |
|
||||||
|
CSN Resources SA |
|
||||||
|
8.88%, 12/05/2030 |
1,095,000 |
|
818,715 |
||||
|
5.88%, 04/08/2032 |
335,000 |
|
206,864 |
||||
|
Samarco Mineracao SA, |
1,379,973 |
|
1,388,103 |
||||
|
Vedanta Resources Finance II PLC |
|
||||||
|
10.88%, 09/17/2029 (d) |
1,489,000 |
|
1,583,242 |
||||
|
7.75%, 07/13/2037 (d) |
458,000 |
|
455,253 |
||||
|
|
4,452,177 |
||||||
|
Oil, Gas & Consumable Fuels – 1.5% |
|
||||||
|
Azule Energy Finance PLC, |
1,727,000 |
|
1,737,727 |
||||
|
Ecopetrol SA, |
1,178,000 |
|
1,276,666 |
||||
|
Petroleos Mexicanos, |
1,396,000 |
|
1,195,995 |
||||
|
|
4,210,388 |
||||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
41 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
|
Par |
Value |
||||||
|
EMERGING MARKETS (continued) |
|
|
||||||
|
Real Estate Management & Development – 0.1% |
|
|
||||||
|
RKPF Overseas Ltd. |
|
|
||||||
|
5.90%, 09/05/2028 (i) |
441,811 |
$ |
74,189 |
|
||||
|
6.00%, 03/04/2029 (i) |
441,488 |
|
73,210 |
|
||||
|
|
147,399 |
|
||||||
|
Total High Yield |
|
12,398,565 |
|
|||||
|
TOTAL EMERGING MARKETS |
|
12,398,565 |
|
|||||
|
|
Shares |
|
||||||
|
SHORT-TERM INVESTMENTS – 1.8% |
|
|
||||||
|
MONEY MARKET FUNDS – 1.4% |
|
|
||||||
|
First American Government Obligations Fund – Class X, 3.56% (m) |
|
3,906,599 |
|
3,906,599 |
|
|||
|
|
Par |
|
||||||
|
U.S. TREASURY BILLS – 0.4% |
|
|
||||||
|
3.63%, 07/23/2026 (n) |
|
1,000,000 |
|
997,810 |
|
|||
|
TOTAL SHORT-TERM INVESTMENTS |
|
|
|
4,904,409 |
|
|||
|
TOTAL INVESTMENTS – 135.2% |
|
|
|
376,003,307 |
|
|||
|
Liabilities in Excess of Other Assets – (35.2)% |
|
|
|
(97,816,587 |
) |
|||
|
TOTAL NET ASSETS – 100.0% |
|
|
$ |
278,186,720 |
|
|||
|
Par amount is in USD unless otherwise indicated. |
||||
|
Percentages are stated as a percent of net assets. |
||||
|
CMT |
— |
Constant Maturity Treasury |
||
|
EURIBOR |
— |
Euro Interbank Offered Rate |
||
|
LLC |
— |
Limited Liability Company |
||
|
LP |
— |
Limited Partnership |
||
|
PIK |
— |
Payment in Kind |
||
|
PLC |
— |
Public Limited Company |
||
|
REIT |
— |
Real Estate Investment Trust |
||
|
SOFR |
— |
Secured Overnight Financing Rate |
||
|
SONIA |
— |
Sterling Overnight Index Average |
||
|
CAD |
— |
Canadian Dollar |
||
|
EUR |
— |
Euro |
||
|
GBP |
— |
British Pound |
||
|
JPY |
— |
Japanese Yen |
||
|
SEK |
— |
Swedish Krona |
||
(a) To the extent that the Fund invests more heavily in a particular industry or sector of the economy, its performance will be especially sensitive to developments that significantly affect that industry or sector.
(b) Fair value determined using significant unobservable inputs in accordance with procedures established by and under the supervision of the Adviser, acting as Valuation Designee. These securities represented $144,661,725 or 52.0% of net assets as of June 30, 2026.
(c) As of June 30, 2026, the Fund had entered into the following commitments to fund various revolving and delayed draw senior secured and subordinated loans. Such commitments are subject to the satisfaction of certain conditions set forth in the documents governing these loans and there can be no assurance that such conditions will be satisfied. All values are reflected at par.
____________
See Notes to Consolidated Financial Statements.
|
42 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
Company |
Investment Type |
Total revolving |
Less: |
Total |
|||||||
|
Angel Lux Bidco |
First Lien Delay Draw Term Loan |
$ |
425,826 |
$ |
0 |
$ |
425,826 |
||||
|
Bayou Intermediate II |
First Lien Delay Draw Term Loan |
|
130,682 |
|
101,932 |
|
28,750 |
||||
|
Bayou Intermediate II |
First Lien Delay Draw Term Loan |
|
923,485 |
|
720,318 |
|
203,167 |
||||
|
Bayou Intermediate II |
First Lien Delay Draw Term Loan |
|
95,833 |
|
74,750 |
|
21,083 |
||||
|
Bayou Intermediate II |
First Lien Revolver |
|
251,897 |
|
122,800 |
|
129,097 |
||||
|
Bayou Intermediate II |
First Lien Revolver |
|
362,103 |
|
176,525 |
|
185,578 |
||||
|
CentralSquare Technologies |
First Lien Revolver |
|
66,000 |
|
0 |
|
66,000 |
||||
|
Clase Azul |
Revolver |
|
667,000 |
|
13,340 |
|
653,660 |
||||
|
CPS Mezzanine |
Tranche B Revolver |
|
3,750,000 |
|
3,482,620 |
|
267,380 |
||||
|
Creek Parent |
First Lien Revolver |
|
471,000 |
|
0 |
|
471,000 |
||||
|
Europa Biosite |
Tranche 3 Delay Draw Term Loan |
|
9,158,000 |
|
0 |
|
9,158,000 |
||||
|
Evergreen IX Borrower |
First Lien Revolver |
|
127,000 |
|
0 |
|
127,000 |
||||
|
Geotechnical Merger Sub |
Delay Draw Term Loan |
|
623,000 |
|
351,995 |
|
271,005 |
||||
|
Geotechnical Merger Sub |
Revolver |
|
234,000 |
|
54,600 |
|
179,400 |
||||
|
Grove Waterpark and Resort |
Revolver |
|
175,377 |
|
87,688 |
|
87,689 |
||||
|
ICIMS, Inc. |
First Lien Revolver |
|
68,395 |
|
19,835 |
|
48,560 |
||||
|
ICIMS, Inc. |
First Lien Revolver |
|
73,280 |
|
21,251 |
|
52,029 |
||||
|
ICIMS, Inc. |
First Lien Revolver |
|
15,877 |
|
4,604 |
|
11,273 |
||||
|
Integrity Marketing Acquisition LLC |
First Lien Delay Draw Term Loan |
|
519,866 |
|
0 |
|
519,866 |
||||
|
Integrity Marketing Acquisition LLC |
First Lien Revolver |
|
234,995 |
|
0 |
|
234,995 |
||||
|
Inventus Buyer |
Revolver |
|
539,000 |
|
107,800 |
|
431,200 |
||||
|
Kings Buyer LLC |
First Lien Revolver |
|
472,406 |
|
350,368 |
|
122,038 |
||||
|
Kite Midco II |
Term Loan |
|
216,000 |
|
0 |
|
216,000 |
||||
|
Legends Hospitality Holding Co. |
First Lien Revolver |
|
40,966 |
|
21,507 |
|
19,459 |
||||
|
Legends Hospitality Holding Co. |
First Lien Revolver |
|
1,791 |
|
940 |
|
851 |
||||
|
Legends Hospitality Holding Co. |
First Lien Revolver |
|
109,243 |
|
57,353 |
|
51,890 |
||||
|
Lightbox Intermediate |
Revolver |
|
77,000 |
|
0 |
|
77,000 |
||||
|
LSL Holdco |
First Lien Revolver |
|
266,412 |
|
191,817 |
|
74,595 |
||||
|
Monotype Imaging Holdings |
First Lien Revolver |
|
176,000 |
|
0 |
|
176,000 |
||||
|
MRI Software LLC |
First Lien Revolver |
|
132,800 |
|
33,200 |
|
99,600 |
||||
|
MRI Software LLC |
First Lien Revolver |
|
33,200 |
|
8,300 |
|
24,900 |
||||
|
MTC Holdings |
First Lien Revolver |
|
103,000 |
|
0 |
|
103,000 |
||||
|
NEFCO |
First Lien Delay Draw Term Loan |
|
713,595 |
|
0 |
|
713,595 |
||||
|
Next Holdco LLC |
First Lien Revolver |
|
80,000 |
|
0 |
|
80,000 |
||||
|
NFM & J LP |
First Lien Revolver |
|
12,023 |
|
6,512 |
|
5,511 |
||||
|
NFM & J LP |
First Lien Revolver |
|
98,340 |
|
53,268 |
|
45,072 |
||||
|
NFO Orange Buyer |
First Lien Revolver |
|
475,730 |
|
261,651 |
|
214,079 |
||||
|
Optimizely North America |
First Lien Revolver |
|
231,000 |
|
0 |
|
231,000 |
||||
|
PetVet Care Centers LLC |
First Lien Revolver |
|
102,333 |
|
30,700 |
|
71,633 |
||||
|
PetVet Care Centers LLC |
First Lien Revolver |
|
102,333 |
|
30,700 |
|
71,633 |
||||
|
PetVet Care Centers LLC |
First Lien Revolver |
|
102,333 |
|
30,700 |
|
71,633 |
||||
|
Pluralsight Inc |
First Lien Delay Draw Term Loan |
|
60,308 |
|
0 |
|
60,308 |
||||
|
Pluralsight Inc |
First Lien Revolver |
|
24,123 |
|
0 |
|
24,123 |
||||
|
Premium Parent |
First Lien Revolver |
|
744,919 |
|
182,091 |
|
562,828 |
||||
|
Protein For Pets Opco |
First Lien Revolver |
|
103,000 |
|
0 |
|
103,000 |
||||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
43 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
|
Company |
Investment Type |
Total revolving |
Less: |
Total |
|||||||
|
Resistance Holdings |
Revolver |
$ |
312,000 |
$ |
0 |
$ |
312,000 |
||||
|
Silk Holdings III |
First Lien Revolver |
|
113,000 |
|
7,910 |
|
105,090 |
||||
|
Sorenson Communications |
Revolver |
|
198,000 |
|
0 |
|
198,000 |
||||
|
Spruce Bidco II |
First Lien Revolver |
|
175,429 |
|
68,223 |
|
107,206 |
||||
|
Spruce Bidco II |
First Lien Revolver |
|
263,143 |
|
102,332 |
|
160,811 |
||||
|
Spruce Bidco II |
First Lien Revolver |
|
175,429 |
|
68,222 |
|
107,207 |
||||
|
The Iris |
First Lien Delay Draw Term Loan |
|
4,750,000 |
|
4,677,757 |
|
72,243 |
||||
|
THG Acquisition |
First Lien Delay Draw Term Loan |
|
238,480 |
|
176,920 |
|
61,560 |
||||
|
THG Acquisition |
First Lien Revolver |
|
118,573 |
|
29,135 |
|
89,438 |
||||
|
THG Acquisition |
First Lien Revolver |
|
427 |
|
105 |
|
322 |
||||
|
Thrive Bidco |
Term Loan |
|
1,890,000 |
|
0 |
|
1,890,000 |
||||
|
Truck-Lite Company |
First Lien Revolver |
|
105,000 |
|
0 |
|
105,000 |
||||
|
USIC Holdings |
First Lien Delay Draw Term Loan |
|
28,520 |
|
22,985 |
|
5,535 |
||||
|
USIC Holdings |
First Lien Delay Draw Term Loan |
|
167,626 |
|
135,095 |
|
32,531 |
||||
|
USIC Holdings |
First Lien Revolver |
|
23,185 |
|
20,800 |
|
2,385 |
||||
|
USIC Holdings |
First Lien Revolver |
|
40,573 |
|
36,400 |
|
4,173 |
||||
|
USIC Holdings |
First Lien Revolver |
|
11,592 |
|
10,400 |
|
1,192 |
||||
|
USIC Holdings |
First Lien Revolver |
|
28,981 |
|
26,000 |
|
2,981 |
||||
|
USIC Holdings |
First Lien Revolver |
|
77,669 |
|
69,680 |
|
7,989 |
||||
|
WP CPP Holdings |
First Lien Revolver |
|
90,000 |
|
0 |
|
90,000 |
||||
|
$ |
32,199,098 |
$ |
12,051,129 |
$ |
20,147,969 |
||||||
(d) Security is exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may only be resold in transactions exempt from registration to qualified institutional investors. As of June 30, 2026, the value of these securities total $126,719,590 or 45.6% of the Fund’s net assets.
(e) Zero coupon bonds make no periodic interest payments.
(f) Restricted security purchased in a private placement transaction in which resale to the public may require registration. As of June 30, 2026, the value of these securities total $1,385,797 or 0.5% of the Fund’s net assets.
(g) Non-income producing security.
(h) Represents less than 0.05% of net assets.
(i) Issuer is currently in default.
(j) Coupon rate is variable based on the weighted average coupon of the underlying collateral. To the extent the weighted average coupon of the underlying assets which comprise the collateral increases or decreases, the coupon rate of this security will increase or decrease correspondingly. The rate disclosed is as of June 30, 2026.
(k) Step coupon bond. The rate disclosed is as of June 30, 2026.
(l) Interest only security.
(m) The rate shown represents the 7-day annualized yield as of June 30, 2026.
(n) The rate shown is the annualized yield as of June 30, 2026.
(o) These securities are pledged as collateral for the credit facility.
____________
See Notes to Consolidated Financial Statements.
|
44 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
Futures Contracts:
As of June 30, 2026, the following futures contracts were outstanding:
|
Description |
Contracts |
Expiration Date |
Notional Value |
Value/Unrealized |
|||||||
|
U.S. Treasury 2 Year Note |
294 |
09/30/2026 |
$ |
60,603,047 |
$ |
(16,312 |
) |
||||
|
Net Unrealized Depreciation |
|
$ |
(16,312 |
) |
|||||||
Forward Currency Contracts:
As of June 30, 2026, the following currency contracts were outstanding:
|
Counterparty |
Settlement Date |
Currency Purchased |
Currency Sold |
|
Unrealized |
|||||||||||
|
State Street Bank & Trust Co. |
07/16/2026 |
USD |
5,697,128 |
AUD |
8,060,678 |
$ |
117,997 |
|
||||||||
|
State Street Bank & Trust Co. |
07/16/2026 |
USD |
361,768 |
CAD |
498,779 |
|
9,822 |
|
||||||||
|
State Street Bank & Trust Co. |
07/16/2026 |
USD |
58,065,929 |
EUR |
49,420,373 |
|
1,559,784 |
|
||||||||
|
State Street Bank & Trust Co. |
07/16/2026 |
USD |
13,012,873 |
GBP |
9,667,026 |
|
190,250 |
|
||||||||
|
State Street Bank & Trust Co. |
07/16/2026 |
USD |
343,739 |
JPY |
53,891,207 |
|
11,858 |
|
||||||||
|
State Street Bank & Trust Co. |
07/16/2026 |
USD |
807,930 |
SEK |
7,392,971 |
|
44,787 |
|
||||||||
|
State Street Bank & Trust Co. |
07/16/2026 |
AUD |
390,051 |
USD |
277,914 |
|
(7,944 |
) |
||||||||
|
State Street Bank & Trust Co. |
07/16/2026 |
EUR |
3,548,822 |
USD |
4,149,388 |
|
(91,744 |
) |
||||||||
|
State Street Bank & Trust Co. |
07/16/2026 |
GBP |
391,862 |
USD |
528,793 |
|
(9,016 |
) |
||||||||
|
State Street Bank & Trust Co. |
07/16/2026 |
JPY |
1,793,473 |
USD |
11,335 |
|
(290 |
) |
||||||||
|
Net Unrealized Appreciation |
$ |
1,825,504 |
|
|||||||||||||
|
AUD |
— |
Australian Dollars |
||
|
CAD |
— |
Canadian Dollar |
||
|
EUR |
— |
Euro |
||
|
GBP |
— |
British Pound |
||
|
JPY |
— |
Japanese Yen |
||
|
SEK |
— |
Swedish Krona |
||
|
USD |
— |
United States Dollar |
Credit Default Swap Contracts — Sell Protection (a):
As of June 30, 2026, the following credit default swap contracts were outstanding:
|
Reference Obligation |
Financing |
Payment |
Maturity Date |
Notional |
Value (c) |
Upfront |
Unrealized |
||||||||||||
|
Sell Protection (a): |
|
|
|
|
|
||||||||||||||
|
CDS Cobalt Series 1 |
4.95 |
% |
Quarterly |
08/07/2030 |
$ |
1,600,000 |
$ |
1,611,140 |
$ |
1,409,882 |
$ |
201,258 |
|||||||
Goldman Sachs is the counterparty for the swap.
(a) If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation of underlying securities comprising the referenced index.
(b) The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
45 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
(c) The prices and resulting values for credit default swap agreements on credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the period end. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.
|
Allocation of Portfolio Holdings by Country as of June 30, 2026 (% of Net Assets) |
|||||||
|
United States |
$ |
277,722,982 |
|
99.8 |
% |
||
|
Cayman Islands |
|
19,569,265 |
|
7.0 |
|
||
|
United Kingdom |
|
14,035,341 |
|
5.0 |
|
||
|
Ireland |
|
9,424,593 |
|
3.4 |
|
||
|
Germany |
|
8,587,588 |
|
3.1 |
|
||
|
France |
|
7,546,745 |
|
2.7 |
|
||
|
Luxembourg |
|
5,880,328 |
|
2.2 |
|
||
|
Netherlands |
|
3,911,409 |
|
1.4 |
|
||
|
Mexico |
|
3,709,622 |
|
1.3 |
|
||
|
Canada |
|
3,644,374 |
|
1.3 |
|
||
|
Brazil |
|
2,795,920 |
|
1.0 |
|
||
|
Italy |
|
2,636,142 |
|
0.9 |
|
||
|
Colombia |
|
2,286,384 |
|
0.8 |
|
||
|
Spain |
|
2,113,292 |
|
0.8 |
|
||
|
Bermuda |
|
2,085,960 |
|
0.8 |
|
||
|
Angola |
|
1,737,727 |
|
0.6 |
|
||
|
India |
|
1,583,242 |
|
0.6 |
|
||
|
Jersey |
|
1,351,530 |
|
0.5 |
|
||
|
Sweden |
|
1,337,490 |
|
0.5 |
|
||
|
Japan |
|
913,628 |
|
0.3 |
|
||
|
Australia |
|
783,491 |
|
0.3 |
|
||
|
Czech Republic |
|
631,570 |
|
0.2 |
|
||
|
Finland |
|
473,756 |
|
0.2 |
|
||
|
Argentina |
|
438,001 |
|
0.2 |
|
||
|
Nigeria |
|
402,626 |
|
0.1 |
|
||
|
Turkey |
|
252,902 |
|
0.1 |
|
||
|
China |
|
147,399 |
|
0.1 |
|
||
|
Liabilities in Excess of Other Assets |
|
(97,816,587 |
) |
(35.2 |
) |
||
|
$ |
278,186,720 |
|
100.0 |
% |
|||
The accompanying notes are an integral part of these financial statements.
____________
See Notes to Consolidated Financial Statements.
|
46 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
| Assets: |
|
| ||
| Investments in securities, at value (Cost $381,459,660) | $ | 376,003,307 |
| |
| Receivable for investments sold |
| 6,976,575 |
| |
| Foreign currency, at value (Cost $5,970,446) |
| 5,889,328 |
| |
| Interest and dividends receivable |
| 4,444,167 |
| |
| Unrealized appreciation on forward currency contracts (Note 3) |
| 1,934,498 |
| |
| Premiums paid for swap contracts |
| 1,409,882 |
| |
| Deposit at broker for future contracts |
| 430,394 |
| |
| Cash collateral posted with counterparties |
| 391,851 |
| |
| Unrealized appreciation on swap contracts (Note 3) |
| 201,258 |
| |
| Receivable for fund shares sold |
| 173,273 |
| |
| Cash |
| 37,784 |
| |
| Prepaid expenses |
| 33,316 |
| |
| Total assets |
| 397,925,633 |
| |
|
|
| |||
| Liabilities: |
|
| ||
| Payable for credit facility (Note 6) |
| 111,000,000 |
| |
| Deferred debt issuance costs, credit facility (Note 6) |
| (179,464 | ) | |
| Payable for investments purchased |
| 7,800,265 |
| |
| Investment advisory fees payable, net (Note 4) |
| 326,538 |
| |
| Unrealized depreciation on unfunded loan commitments |
| 111,078 |
| |
| Unrealized depreciation on forward currency contracts (Note 3) |
| 108,994 |
| |
| Variation margin on futures contracts (Note 3) |
| 34,453 |
| |
| Distribution fees payable |
| 20,306 |
| |
| Interest payable for credit facility (Note 6) |
| 6,308 |
| |
| Accrued expenses |
| 510,435 |
| |
| Total liabilities |
| 119,738,913 |
| |
| Indemnifications, commitments and contingencies (Notes 4 and 10) |
|
|
| |
| Net Assets | $ | 278,186,720 |
| |
|
|
| |||
| Composition of Net Assets: |
|
| ||
| Paid-in capital |
| 294,301,992 |
| |
| Accumulated losses |
| (16,115,272 | ) | |
| Net Assets | $ | 278,186,720 |
| |
|
|
| |||
| Net Assets |
|
| ||
| Class A Shares – Net Assets | $ | 486,886 |
| |
| Shares outstanding |
| 55,352 |
| |
| Net asset value per share | $ | 8.80 |
| |
| Offering price per share based on a maximum sales charge of 2.50% | $ | 9.02 |
| |
| Class D Shares – Net Assets | $ | 277,699,834 |
| |
| |
| |
| |
| Net asset value per share | $ | 8.80 |
|
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
47 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. For the Six Months Ended June 30, 2026 |
|
Investment Income: |
|
|
||
|
Interest (net of foreign withholding tax of $140,271) |
$ |
18,722,810 |
|
|
|
Dividends and distributions |
|
158,834 |
|
|
|
Total investment income |
|
18,881,644 |
|
|
|
|
|
|||
|
Expenses: |
|
|
||
|
Investment advisory fees (Note 4) |
|
2,497,147 |
|
|
|
Distribution fees – Class A |
|
982 |
|
|
|
Distribution fees – Class D |
|
48,697 |
|
|
|
Fund accounting and sub-administration fees |
|
155,487 |
|
|
|
Legal fees |
|
145,221 |
|
|
|
Audit and tax services |
|
117,555 |
|
|
|
Directors’ fees |
|
103,076 |
|
|
|
Valuation services |
|
43,792 |
|
|
|
Registration fees |
|
39,209 |
|
|
|
Custodian fees |
|
33,403 |
|
|
|
Miscellaneous |
|
27,039 |
|
|
|
Reports to shareholders |
|
25,547 |
|
|
|
Transfer agent fees |
|
22,790 |
|
|
|
Insurance |
|
7,091 |
|
|
|
Total operating expenses |
|
3,267,036 |
|
|
|
Interest expense and credit facility fees (Note 6) |
|
2,901,174 |
|
|
|
Less expenses waived by the investment adviser (Note 4) |
|
(191,836 |
) |
|
|
Net expenses |
|
5,976,374 |
|
|
|
Net Investment income |
|
12,905,270 |
|
|
|
|
|
|||
|
Net realized gain (loss) on: |
|
|
||
|
Investments |
|
(1,054,039 |
) |
|
|
Foreign currency transactions |
|
29,075 |
|
|
|
Forward currency contracts |
|
(544,841 |
) |
|
|
Futures contracts |
|
(685,324 |
) |
|
|
Swap contracts |
|
(132,754 |
) |
|
|
Net realized loss |
|
(2,387,883 |
) |
|
|
|
|
|||
|
Net change in unrealized appreciation (depreciation) on: |
|
|
||
|
Investments |
|
(6,640,941 |
) |
|
|
Unfunded loan commitments |
|
(167,889 |
) |
|
|
Foreign currency |
|
(86,701 |
) |
|
|
Foreign currency translations |
|
162,561 |
|
|
|
Forward currency contracts |
|
2,650,971 |
|
|
|
Futures contracts |
|
(51,672 |
) |
|
|
Swap contracts |
|
176,873 |
|
|
|
Net change in unrealized depreciation |
|
(3,956,798 |
) |
|
|
Net realized and unrealized loss |
|
(6,344,681 |
) |
|
|
Net increase in net assets resulting from operations |
$ |
6,560,589 |
|
____________
See Notes to Consolidated Financial Statements.
|
48 |
|
|
For the |
For the |
|||||||
|
Increase (Decrease) in Net Assets Resulting from Operations: |
|
|
|
|
||||
|
Net investment income |
$ |
12,905,270 |
|
$ |
24,968,825 |
|
||
|
Net realized loss |
|
(2,387,883 |
) |
|
(3,053,189 |
) |
||
|
Net change in unrealized appreciation (depreciation) |
|
(3,956,798 |
) |
|
1,801,815 |
|
||
|
Net increase in net assets resulting from operations |
|
6,560,589 |
|
|
23,717,451 |
|
||
|
|
|
|
|
|||||
|
Distributions to Shareholders: |
|
|
|
|
||||
|
From distributable earnings: |
|
|
|
|
||||
|
Class A shares |
|
(16,362 |
) |
|
— |
|
||
|
Class D shares |
|
(12,877,024 |
) |
|
(24,717,609 |
) |
||
|
From return of capital: |
|
|
|
|
||||
|
Class A shares |
|
— |
|
|
— |
|
||
|
Class D shares |
|
— |
|
|
(3,709,846 |
) |
||
|
Total distributions to shareholders |
|
(12,893,386 |
) |
|
(28,427,455 |
) |
||
|
|
|
|
|
|||||
|
Capital Share Transactions: |
|
|
|
|
||||
|
Proceeds from shares sold |
|
13,355,021 |
|
|
40,423,235 |
|
||
|
Reinvestment of distributions |
|
10,035,385 |
|
|
20,959,635 |
|
||
|
Repurchase of shares (Note 8) |
|
(53,808,794 |
) |
|
(34,333,503 |
) |
||
|
Net increase (decrease) in net assets from capital share transactions |
|
(30,418,388 |
) |
|
27,049,367 |
|
||
|
Total increase (decrease) in net assets |
|
(36,751,185 |
) |
|
22,339,363 |
|
||
|
|
|
|
|
|||||
|
Net Assets: |
|
|
|
|
||||
|
Beginning of period |
|
314,937,905 |
|
|
292,598,542 |
|
||
|
End of period |
$ |
278,186,720 |
|
$ |
314,937,905 |
|
||
|
|
|
|
|
|||||
|
Share Transactions: |
|
|
|
|
||||
|
Class A: |
|
|
|
|
||||
|
Shares sold |
|
53,883 |
|
|
— |
|
||
|
Shares reinvested |
|
1,469 |
|
|
— |
|
||
|
Shares repurchased (Note 8) |
|
— |
|
|
— |
|
||
|
Net increase in shares outstanding |
|
55,352 |
|
|
— |
|
||
|
Class D: |
|
|
|
|
||||
|
Shares sold |
|
1,431,644 |
|
|
4,420,697 |
|
||
|
Shares reinvested |
|
1,138,916 |
|
|
2,318,159 |
|
||
|
Shares repurchased (Note 8) |
|
(5,964,738 |
) |
|
(3,764,652 |
) |
||
|
Net increase (decrease) in shares outstanding |
|
(3,394,178 |
) |
|
2,974,204 |
|
||
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
49 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. For the Six Months Ended June 30, 2026 |
|
Increase (Decrease) in Cash: |
|
|
||
|
Cash flows provided by (used for) operating activities |
|
|
||
|
Net Increase in net assets resulting from operations |
$ |
6,560,589 |
|
|
|
Adjustments to reconcile net Increase in net assets resulting from operations to net cash used for operating expenses |
|
|
||
|
Purchases of long-term portfolio investments and principal payups |
|
(135,409,805 |
) |
|
|
Proceeds from disposition of long-term portfolio investments and principal paydowns |
|
148,197,723 |
|
|
|
Net purchases and sales of short-term portfolio investments |
|
12,427,321 |
|
|
|
Amortization of deferred debt issuance costs |
|
20,653 |
|
|
|
Decrease in interest receivable |
|
612,769 |
|
|
|
Decrease in receivable for fund shares sold |
|
147,187 |
|
|
|
Decrease in prepaid expenses |
|
15,216 |
|
|
|
Decrease in interest payable for credit facility |
|
(370,779 |
) |
|
|
Increase in distribution fees payable |
|
20,306 |
|
|
|
Increase in payable for variation margin |
|
31,125 |
|
|
|
Increase in investment advisory fees payable |
|
132,767 |
|
|
|
Decrease in accrued expenses |
|
(81,417 |
) |
|
|
Premiums paid for swap contracts |
|
170,353 |
|
|
|
Net accretion of discount on investments and other adjustments to cost |
|
(1,918,377 |
) |
|
|
Net change in unrealized depreciation on investments |
|
6,640,941 |
|
|
|
Net change in unrealized depreciation on foreign currency |
|
86,701 |
|
|
|
Increase in unrealized depreciation on unfunded commitments |
|
167,889 |
|
|
|
Increase in unrealized appreciation on swap contracts |
|
(176,873 |
) |
|
|
Net change in unrealized appreciation on forward currency contracts |
|
(2,650,971 |
) |
|
|
Net realized loss on investment transactions |
|
1,054,039 |
|
|
|
Net cash used in operating activities |
|
35,677,339 |
|
|
|
|
|
|||
|
Cash flows provided by (used for) financing activities: |
|
|
||
|
Proceeds from credit facility |
|
11,500,000 |
|
|
|
Proceeds from shares sold |
|
13,355,021 |
|
|
|
Repurchase of shares |
|
(53,808,794 |
) |
|
|
Distributions paid to shareholders, net of reinvestments |
|
(2,858,001 |
) |
|
|
Net cash provided by financing activities |
|
(31,811,744 |
) |
|
|
Effect of exchange rate changes on cash |
|
(86,701 |
) |
|
|
Net increase in cash |
|
3,778,864 |
|
|
|
Cash at beginning of period |
|
2,970,493 |
|
|
|
Cash at end of period |
$ |
6,749,357 |
|
|
|
|
|
|||
|
Supplemental Disclosure of Cash Flow Information: |
|
|
||
|
Interest payments on the credit facility for the period ended June 30, 2026 totaled $3,271,953. |
|
|
||
|
Non-cash financing activities not included consist of reinvestment of distributions for the period ended June 30, 2026 of $10,035,385. |
|
|||
|
|
|
|||
|
Reconciliation of Cash at the End of Period to the Consolidated Statement of Assets and Liabilities: |
|
|
||
|
Cash |
$ |
37,784 |
|
|
|
Foreign currency |
|
5,889,328 |
|
|
|
Cash collateral posted with counterparties |
|
391,851 |
|
|
|
Cash on deposit with brokers for futures contracts |
|
430,394 |
|
|
|
Cash at end of period |
$ |
6,749,357 |
|
|
____________
See Notes to Consolidated Financial Statements.
|
50 |
|
|
Class A |
For the Period |
|||
|
Per Share Operating Performance: |
|
|
||
|
Net asset value, beginning of period |
$ |
9.05 |
|
|
|
|
|
|||
|
Income from Investment Operations: |
|
|
||
|
Net investment income2 |
|
0.27 |
|
|
|
Net realized and change in unrealized loss2 |
|
(0.14 |
) |
|
|
Net increase in net asset value resulting from operations |
|
0.13 |
|
|
|
|
|
|||
|
Distributions to Shareholders: |
|
|
||
|
From net investment income |
|
(0.38 |
) |
|
|
Total distributions paid* |
|
(0.38 |
) |
|
|
Net asset value, end of period |
$ |
8.80 |
|
|
|
Total Investment Return†,3 |
|
1.48 |
% |
|
|
|
|
|||
|
Ratios to Average Net Assets/Supplementary Data: |
|
|
||
|
Net assets, end of period (000s) |
$ |
487 |
|
|
|
Gross operating expenses excluding interest expense4 |
|
3.04 |
% |
|
|
Interest expense4 |
|
2.09 |
% |
|
|
Gross operating expenses4 |
|
5.13 |
% |
|
|
Net expenses, including fee waivers and reimbursement or recoupment and excluding interest expense4 |
|
2.85 |
% |
|
|
Net expenses, including fee waivers and reimbursement or recoupment and interest expense4 |
|
4.94 |
% |
|
|
Net investment income4 |
|
8.43 |
% |
|
|
Net investment income, excluding the effect of fee waivers and reimbursement or recoupment4 |
|
8.24 |
% |
|
|
Portfolio turnover rate3 |
|
34 |
% |
|
____________
* Distributions for annual periods determined in accordance with federal income tax regulations.
† Total investment return is computed based upon the net asset value of the Fund’s shares and excludes the effects of sales charges or contingent deferred sales charges, if applicable. Distributions are assumed to be reinvested at the net asset value of the Class on the ex-date of the distribution.
1 Commencement of operations was February 17, 2026.
2 Per share amounts presented are based on average shares outstanding throughout the period indicated.
3 Not annualized for periods less than one year.
4 Annualized for periods less than one year.
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
51 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. |
| Class D | For the |
| For the Period | |||||||||||||||||||||
| 2025 | 2024 | 2023 | 2022 | |||||||||||||||||||||
| Per Share Operating Performance: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
| Net asset value, beginning of period | $ | |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| Income from Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
| Net investment income2 |
| 0.39 |
|
| 0.74 |
|
| 0.81 |
|
| 0.78 |
|
| 0.50 |
|
| 0.02 |
| ||||||
| Net realized and change in unrealized gain (loss)2 |
| (0.19 | ) |
| (0.04 | ) |
| 0.23 |
|
| 0.20 |
|
| (1.20 | ) |
| (0.07 | ) | ||||||
| Net increase (decrease) in net asset value resulting from operations |
| 0.20 |
|
| 0.70 |
|
| 1.04 |
|
| 0.98 |
|
| (0.70 | ) |
| (0.05 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
| From net investment income |
| (0.41 | ) |
| (0.73 | ) |
| (0.77 | ) |
| (0.69 | ) |
| (0.65 | ) |
| (0.01 | ) | ||||||
| From return of capital distributions |
| — |
|
| (0.11 | ) |
| — |
|
| — |
|
| — |
|
| — |
| ||||||
| Total distributions paid* |
| (0.41 | ) |
| (0.84 | ) |
| (0.77 | ) |
| (0.69 | ) |
| (0.65 | ) |
| (0.01 | ) | ||||||
| Net asset value, end of period | $ | |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | |
| ||||||
| Total Investment Return†,3 |
| 2.24 | % |
| 7.94 | % |
| 12.11 | % |
| 11.76 | % |
| (7.03 | )% |
| (0.37 | )% | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| Ratios to Average Net Assets/ |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
| Net assets, end of period (000s) | $ | 277,700 |
| $ | 314,938 |
| $ | 292,599 |
| $ | 230,117 |
| $ | 151,702 |
| $ | 150,092 |
| ||||||
| Gross operating expenses excluding interest expense4 |
| 2.24 | % |
| 2.12 | % |
| 2.11 | % |
| 2.03 | % |
| 1.96 | % |
| 5.55 | % | ||||||
| Interest expense4 |
| 1.99 | % |
| 1.71 | % |
| 1.35 | % |
| 0.98 | % |
| 0.55 | % |
| — | % | ||||||
| Gross operating expenses4 |
| 4.23 | % |
| 3.83 | % |
| 3.46 | % |
| 3.01 | % |
| 2.51 | % |
| 5.55 | % | ||||||
| Net expenses, including fee waivers and reimbursement or recoupment and excluding interest expense4 |
| 2.11 | % |
| 2.10 | % |
| 2.10 | % |
| 2.10 | % |
| 2.10 | % |
| 2.10 | % | ||||||
| Net expenses, including fee waivers and reimbursement or recoupment and interest expense4 |
| 4.10 | % |
| 3.81 | % |
| 3.45 | % |
| 3.08 | % |
| 2.65 | % |
| 2.10 | % | ||||||
| Net investment income4 |
| 8.85 | % |
| 8.06 | % |
| 8.86 | % |
| 8.81 | % |
| 5.64 | % |
| 1.51 | % | ||||||
| Net investment income (loss), excluding the effect of fee waivers and reimbursement or recoupment4 |
| 8.72 | % |
| 8.04 | % |
| 8.85 | % |
| 8.88 | % |
| 5.50 | % |
| (1.94 | )% | ||||||
| Portfolio turnover rate3 |
| 34 | % |
| 41 | % |
| 39 | % |
| 24 | % |
| 25 | % |
| 4 | % | ||||||
____________
* Distributions for annual periods determined in accordance with federal income tax regulations.
† Total investment return is computed based upon the net asset value of the Fund’s shares and excludes the effects of sales charges or contingent deferred sales charges, if applicable. Distributions are assumed to be reinvested at the net asset value of the Class on the ex-date of the distribution.
1 Commencement of operations was November 1, 2021.
2 Per share amounts presented are based on average shares outstanding throughout the period indicated.
3 Not annualized for periods less than one year.
4 Annualized for periods less than one year.
____________
See Notes to Consolidated Financial Statements.
|
52 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. |
The following table sets forth information regarding the Fund’s outstanding senior securities as of the end of each of the Fund’s last ten fiscal years, as applicable.
Senior Securities
| Fiscal or Period End | Total Amount | Asset Coverage | Involuntary | Average | Type of Senior | |||||||
| June 30, 2026 (Unaudited)2 | $ | | $ | |
|
| Credit Facility | |||||
| December 31, 2025 |
| |
| |
|
| Credit Facility | |||||
| December 31, 2024 |
| |
| |
|
| Credit Facility | |||||
| December 31, 2023 |
| |
| |
|
| Credit Facility | |||||
| December 31, 2022 |
| |
| |
|
| Credit Facility | |||||
| December 31, 20213 |
|
|
|
|
|
| N/A | |||||
____________
1
2
3
____________
See Notes to Consolidated Financial Statements.
|
2026 Semi-Annual Report |
53 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
1. Organization
Oaktree Diversified Income Fund Inc. (the “Fund”) was organized as a corporation under the laws of the State of Maryland on June 29, 2021. The Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, closed-end management investment company that continuously offers its shares of common stock, $0.001 par value per share (the “Common Shares”), and is operated as an “interval fund.” The Fund’s Class D shares commenced operations on November 1, 2021. The Fund’s Class A shares commenced operations on February 17, 2026.
The Fund offers four classes of Shares: Class A Shares, Class D Shares, Class T Shares, and Class U Shares. The Fund was granted exemptive relief (the “Exemptive Relief”) from the Securities and Exchange Commission (the “SEC”), permitting the Fund to issue multiple classes of shares and to impose asset-based distribution fees and early-withdrawal fees.
Oaktree Fund Advisors, LLC (the “Adviser”), a Delaware limited liability company and a registered investment adviser under the Investment Advisers Act of 1940, as amended, serves as the investment adviser to the Fund. The Adviser is an affiliate of Oaktree Capital Management, L.P. (“OCM”), a leading global investment management firm headquartered in Los Angeles, California focused on less efficient markets and alternative investments, and is a subsidiary of Brookfield Oaktree Holdings, LLC (formerly, Oaktree Capital Group, LLC) (“OCG,” and collectively with OCM and the Adviser, “Oaktree”). Oaktree was founded in April 1995 and is a leader among global investment managers specializing in alternative investments. As of July 31, 2026, Oaktree is a subsidiary of each of Brookfield Corporation (NYSE: BN; TSX: BN) and Brookfield Asset Management Ltd. (NYSE: BAM; TSX: BAM).
Brookfield Public Securities Group LLC (the “Administrator”), an indirect wholly-owned subsidiary of Brookfield Asset Management Ltd., is registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and serves as Administrator to the Fund.
The Fund’s investment objective is to seek current income and attractive total return. The Fund seeks to achieve its investment objective by investing globally in high-conviction opportunities across Oaktree’s performing credit platform of high-yield bonds, senior loans, structured credit, emerging markets debt and convertibles, inclusive of both public and private credit sectors. High-yield bonds are also referred to as “below-investment grade rated securities” or “junk bonds,” as described in the Fund’s Prospectus. The Fund seeks to add value through three sources: (1) providing exposure to asset classes that require specialized expertise; (2) performing well in each asset class through proprietary, bottom-up and credit research; and (3) allocating capital opportunistically among asset classes based on Oaktree’s assessment of relative value.
Oaktree Diversified Income Fund (Cayman) Ltd. (the “Subsidiary”), a Cayman Islands exempted company and wholly-owned subsidiary of the Fund, was formed on November 11, 2021. The Subsidiary was established for the purpose of investing in certain Regulation S securities. As a wholly-owned subsidiary of the Fund, the financial results of the Subsidiary are included in the consolidated financial statements and financial highlights of the Fund. All investments held by the Subsidiary are disclosed in the Consolidated Schedule of Investments. The Fund may invest up to 25% of its total assets in the Subsidiary. The net assets of the Subsidiary at June 30, 2026 were $9,649,274, or 3.5% of the Fund’s consolidated net assets. The accompanying consolidated financial statements include the accounts of the Subsidiary. All inter-company accounts and transactions have been eliminated in consolidation.
2. Significant Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The Fund is an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services-Investment Companies.
|
54 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
Valuation of Investments: The Fund’s Board of Directors (the “Board”) has adopted procedures for the valuation of the Fund’s securities. The Adviser oversees the day to day responsibilities for valuation determinations under these procedures. The Board regularly reviews the application of these procedures to the securities in the Fund’s portfolio. The Adviser’s Valuation Committee is comprised of senior members of the Adviser’s management team.
The Board has designated the Adviser as the valuation designee pursuant to Rule 2a-5 under the 1940 Act to perform fair value determinations relating to any or all Fund investments. The Board oversees the Adviser in its role as the valuation designee in accordance with the requirements of Rule 2a-5 under the 1940 Act.
Investments in equity securities listed or traded on any securities exchange or traded in the over-the-counter market are valued at the last trade price as of the close of business on the valuation date. If the NYSE closes early, then the equity security will be valued at the last traded price before the NYSE close. Prices of foreign equities that are principally traded on certain foreign markets will generally be adjusted daily pursuant to a fair value pricing service approved by the Board in order to reflect an adjustment for the factors occurring after the close of certain foreign markets but before the NYSE close. When fair value pricing is employed, the value of the portfolio securities used to calculate the Fund’s net asset value (“NAV”) may differ from quoted or official closing prices. Investments in open-end registered investment companies, if any, are valued at the NAV as reported by those investment companies.
Debt securities, including U.S. government securities, listed corporate bonds, other fixed income and asset-backed securities, and unlisted securities and private placement securities, are generally valued at the bid prices furnished by an independent pricing service or, if not valued by an independent pricing service, using bid prices obtained from active and reliable market makers in any such security or a broker-dealer. Valuations from broker-dealers or pricing services consider appropriate factors such as market activity, market activity of comparable securities, yield, estimated default rates, timing of payments, underlying collateral, coupon rate, maturity date, and other factors. Short-term debt securities with remaining maturities of sixty days or less are valued at amortized cost of discount or premium to maturity, unless such valuation, in the judgment of the Adviser’s Valuation Committee, does not represent fair value.
Bank Loans, Assignments, and Participations. Loans (including “Senior Loans” (as described below), delayed funding loans and revolving credit facilities) may be fixed-or floating-rate obligations. Loan interests may take the form of direct interests acquired during a primary distribution and may also take the form of assignments of, novations of or participations in a bank loan acquired in secondary markets. Senior floating rate loans may be made to or issued by U.S. or non-U.S. banks or other corporations (“Senior Loans”). Senior Loans include senior floating rate loans and institutionally traded senior floating rate debt obligations issued by asset-backed pools and other issuers, and interests therein. Loan interests may be acquired from U.S. or foreign commercial banks, insurance companies, finance companies or other financial institutions who have made loans or are members of a lending syndicate or from other holders of loan interests.
Senior Loans typically pay interest at rates which are re-determined periodically on the basis of a floating base lending rate (such as the Secured Overnight Financial Rate, “SOFR,” or a similar reference rate) plus a premium. Senior Loans are typically of below investment grade quality. Senior Loans generally (but not always) hold the most senior position in the capital structure of a borrower and are often secured with collateral. A Senior Loan is typically originated, negotiated and structured by a U.S. or foreign commercial bank, insurance company, finance company or other financial institution (an “Agent”) for a lending syndicate of financial institutions (“Lenders”). The Agent typically administers and enforces the Senior Loan on behalf of the other Lenders in the syndicate. In addition, an institution, typically but not always the Agent, holds any collateral on behalf of the Lenders.
Over-the-counter financial derivative instruments, such as forward currency contracts, options contracts, or swap agreements, derive their values from underlying asset prices, indices, reference rates, other inputs or a combination of these factors. These instruments are normally valued on the basis of evaluations provided by independent pricing services or broker dealer quotations. Depending on the instrument and the terms of the transaction, the value of
|
2026 Semi-Annual Report |
55 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
the derivative instruments can be estimated by a pricing service provider using a series of techniques, such as simulation pricing models. The pricing models use issuer details and other inputs that are observed from actively quoted markets such as indices, spreads, interest rates, curves, dividends and exchange rates.
Securities for which market prices are not readily available, cannot be determined using the sources described above, or the Adviser’s Valuation Committee determines that the quotation or price for a portfolio security provided by a broker-dealer or an independent pricing service is inaccurate will be valued at a fair value determined by the Adviser’s Valuation Committee following the procedures adopted by the Adviser under the supervision of the Board. The Adviser’s valuation policy establishes parameters for the sources, methodologies, and inputs the Adviser’s Valuation Committee uses in determining fair value.
Non-publicly traded debt and equity securities and other securities or instruments for which reliable market quotations are not available are valued by the Adviser using valuation methodologies applied on a consistent basis. These securities may initially be valued at the acquisition price as the best indicator of fair value. The Adviser reviews the significant unobservable inputs, valuations of comparable investments and other similar transactions for investments valued at acquisition price to determine whether another valuation methodology should be utilized. Subsequent valuations will depend on facts and circumstances known as of the valuation date and the application of valuation methodologies further described below. The fair value may also be based on a pending transaction expected to close after the valuation date. These valuation methodologies involve a significant degree of management judgment. Accordingly, valuations do not necessarily represent the amounts which may eventually be realized from sales or other dispositions of investments in the future. Fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to the consolidated financial statements.
The fair valuation methodology may include or consider the following guidelines, as appropriate: (1) evaluation of all relevant factors, including but not limited to, pricing history, current market level, supply and demand of the respective security; (2) comparison to the values and current pricing of securities that have comparable characteristics; (3) knowledge of historical market information with respect to the security; and (4) other factors relevant to the security which would include, but not be limited to, duration, yield, fundamental analytical data, the Treasury yield curve, and credit quality. The fair value may be difficult to determine and thus judgment plays a greater role in the valuation process. Imprecision in estimating fair value can also impact the amount of unrealized appreciation or depreciation recorded for a particular portfolio security and differences in the assumptions used could result in a different determination of fair value, and those differences could be material. For those securities valued by fair valuations, the Adviser’s Valuation Committee reviews and affirms the reasonableness of the valuations based on such methodologies and fair valuation determinations on a regular basis after considering all relevant information that is reasonably available. There can be no assurance that the Fund could purchase or sell a portfolio security at the price used to calculate the Fund’s NAV.
A three-tier hierarchy has been established to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes.
Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
The three-tier hierarchy of inputs is summarized in the three broad levels listed below:
|
Level 1 |
— |
quoted prices in active markets for identical assets or liabilities |
||||
|
Level 2 |
— |
quoted prices in markets that are not active or other significant observable inputs (including, but not limited to: quoted prices for similar assets or liabilities, quoted prices based on recently executed transactions, interest rates, credit risk, etc.) |
||||
|
Level 3 |
— |
significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of assets or liabilities) |
|
56 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
The following table summarizes the Fund’s investments valuation inputs categorized in the disclosure hierarchy as of June 30, 2026:
|
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
|
Assets: |
|
|
|
|
|
|
|
|
||||||||
|
Investments: |
|
|
|
|
|
|
|
|
||||||||
|
Private Credit: |
|
|
|
|
|
|
|
|
||||||||
|
Senior Loans |
$ |
— |
|
$ |
— |
|
$ |
118,225,481 |
|
$ |
118,225,481 |
|
||||
|
Senior Loans (Syndicated) |
|
— |
|
|
3,910,582 |
|
|
10,023,377 |
|
|
13,933,959 |
|
||||
|
Private Placement Equity |
|
— |
|
|
— |
|
|
5,774,461 |
|
|
5,774,461 |
|
||||
|
Preferred Stock |
|
— |
|
|
— |
|
|
1,076,563 |
|
|
1,076,563 |
|
||||
|
Common Stock |
|
28,699 |
|
|
70,003 |
|
|
— |
|
|
98,702 |
|
||||
|
Warrants |
|
— |
|
|
— |
|
|
50,234 |
|
|
50,234 |
|
||||
|
Private Credit – Total |
|
28,699 |
|
|
3,980,585 |
|
|
135,150,116 |
|
|
139,159,400 |
|
||||
|
Corporate Credit: |
|
|
|
|
|
|
|
|
||||||||
|
Senior Loans (Syndicated) |
$ |
— |
|
$ |
71,929,825 |
|
$ |
885,735 |
|
$ |
72,815,560 |
|
||||
|
High Yield |
|
— |
|
|
58,325,678 |
|
|
1,998,200 |
|
|
60,323,878 |
|
||||
|
Investment Grade Bonds |
|
— |
|
|
275,995 |
|
|
— |
|
|
275,995 |
|
||||
|
Corporate Credit – Total |
|
— |
|
|
130,531,498 |
|
|
2,883,935 |
|
|
133,415,433 |
|
||||
|
Structured Credit: |
|
|
|
|
|
|
|
|
||||||||
|
Collateralized Loan Obligations |
$ |
— |
|
$ |
30,759,989 |
|
$ |
— |
|
$ |
30,759,989 |
|
||||
|
Asset-Backed Securities |
|
— |
|
|
20,508,087 |
|
|
6,592,813 |
|
|
27,100,900 |
|
||||
|
Residential Mortgage-Backed Securities |
|
— |
|
|
13,545,936 |
|
|
— |
|
|
13,545,936 |
|
||||
|
Commercial Mortgage-Backed Securities |
|
— |
|
|
12,686,739 |
|
|
34,861 |
|
|
12,721,600 |
|
||||
|
High Yield |
|
— |
|
|
1,997,075 |
|
|
— |
|
|
1,997,075 |
|
||||
|
Structured Credit – Total |
|
— |
|
|
79,497,826 |
|
|
6,627,674 |
|
|
86,125,500 |
|
||||
|
Emerging Markets: |
|
|
|
|
|
|
|
|
||||||||
|
High Yield |
$ |
— |
|
$ |
12,398,565 |
|
$ |
— |
|
$ |
12,398,565 |
|
||||
|
Emerging Markets – Total |
|
— |
|
|
12,398,565 |
|
|
— |
|
|
12,398,565 |
|
||||
|
Money Market Funds |
|
3,906,599 |
|
|
— |
|
|
— |
|
|
3,906,599 |
|
||||
|
U.S. Treasury Bills |
|
— |
|
|
997,810 |
|
|
— |
|
|
997,810 |
|
||||
|
Total Investments |
$ |
3,935,298 |
|
$ |
227,406,284 |
|
$ |
144,661,725 |
|
$ |
376,003,307 |
|
||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Other Financial Instruments: |
|
|
|
|
|
|
|
|
||||||||
|
Forward Currency Contracts* |
$ |
— |
|
$ |
1,934,498 |
|
$ |
— |
|
$ |
1,934,498 |
|
||||
|
Credit Default Swaps* |
|
— |
|
|
201,258 |
|
|
— |
|
|
201,258 |
|
||||
|
Total Other Financial Instruments |
$ |
— |
|
$ |
2,135,756 |
|
$ |
— |
|
$ |
2,135,756 |
|
||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Liabilities: |
|
|
|
|
|
|
|
|
||||||||
|
Other Financial Instruments: |
|
|
|
|
|
|
|
|
||||||||
|
Unfunded Loan Commitments* |
$ |
— |
|
$ |
— |
|
$ |
(111,078 |
) |
$ |
(111,078 |
) |
||||
|
Forward Currency Contracts* |
|
— |
|
|
(108,994 |
) |
|
— |
|
|
(108,994 |
) |
||||
|
Futures Contracts* |
|
(16,312 |
) |
|
— |
|
|
— |
|
|
(16,312 |
) |
||||
|
Total Other Financial Instruments |
$ |
(16,312 |
) |
$ |
(108,994 |
) |
$ |
(111,078 |
) |
$ |
(236,384 |
) |
||||
____________
* The fair value of the Fund’s investment represents the unrealized appreciation (depreciation) as of June 30, 2026.
|
2026 Semi-Annual Report |
57 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
The Fund used valuation approaches consistent with the income approach and market approach to determine fair value of certain Level 3 assets as of June 30, 2026. The valuation methodologies utilized by the Fund included discounted cash flows analysis, recent transaction analysis, market yield analysis and market comparable analysis and are described below.
The discounted cash flows analysis utilizes a discounted cash flow method that incorporates expected timing and level of cash flows, as well as assumptions in determining growth rates, income and expense projections, discount rates, capital structure, terminal values and other factors. The applicability and weight assigned to the income technique is determined based on the availability of reliable projections and comparable companies and transactions.
The recent transaction analysis utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable.
The market yield analysis utilizes expected future cash flows, discounted using estimated current market rates. Discounted cash flow calculations may be adjusted to reflect current market conditions and/or the perceived credit risk of the borrowers. Consideration is also given to a borrower’s ability to meet principal and interest obligations; this may include an evaluation of collateral or the underlying value of the borrower, utilizing either the market or income techniques.
The market comparable analysis utilizes valuations of comparable public companies or transactions and generally seeks to establish the enterprise value of the portfolio company using a market multiple technique. This technique takes into account a specific financial measure (such as earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, free cash flow, net operating income, net income, book value or net asset value) believed to be most relevant for the given company. Consideration may also be given to such factors as acquisition price of the security, historical and projected operational and financial results for the portfolio company, the strengths and weaknesses of the portfolio company relative to its comparable companies, industry trends, general economic and market conditions and other factors deemed relevant. The applicability and weight assigned to the market technique is determined based on the availability of reliable projections and comparable companies and transactions.
The Fund may estimate the fair value of privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions, including the current stock price (by using an enterprise value analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk-free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.
The fair value of the Fund’s credit facility, which qualifies as a financial instrument under ASC Topic 825, Disclosures about Fair Values of Financial Instruments, approximates the carrying amount of $111,000,000 for the credit facility presented in the Consolidated Statement of Assets and Liabilities. As of June 30, 2026, this financial instrument is categorized as Level 2 within the disclosure hierarchy.
|
58 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
The table below shows the significant unobservable valuation inputs that were used by the Adviser’s Valuation Committee to fair value the Level 3 investments as of June 30, 2026:
Quantitative Information about Level 3 Fair Value Measurement
|
Value as of |
Valuation |
Valuation |
Unobservable |
Amount or |
Impact to |
||||||||
|
Private Credit |
|
||||||||||||
|
Senior Loans |
$ |
118,225,481 |
Income Approach |
Discounted Cash Flow |
Yield (Discount Rate of Cash Flows) |
5.0%-36.0% |
Decrease |
||||||
|
|
Market Approach |
Comparable Companies |
Earnings Multiple |
0.9x-1.1x |
Increase |
||||||||
|
Senior Loans (Syndicated) |
$ |
10,023,377 |
Income Approach |
Discounted Cash Flow |
Yield (Discount Rate of Cash Flows) |
9.0%-15.0% |
Decrease |
||||||
|
Private Placement Equity |
$ |
5,774,461 |
Market Approach |
Comparable Companies |
Earnings Multiple |
0.9x-6.5x |
Increase |
||||||
|
|
Income Approach |
Discounted Cash Flow |
Yield (Discount Rate of Cash Flows) |
9.0%-16.0% |
Decrease |
||||||||
|
Preferred Stock |
$ |
1,076,563 |
Income Approach |
Discounted Cash Flow |
Yield (Discount Rate of Cash Flows) |
11.0%-22.0% |
Decrease |
||||||
|
Warrants |
$ |
50,234 |
Other |
Black Scholes |
Volatility |
60.0%-120.0% |
Increase |
||||||
|
Corporate Credit |
|
||||||||||||
|
Senior Loans (Syndicated) |
$ |
885,735 |
Income Approach |
Discounted Cash Flow |
Yield (Discount Rate of Cash Flows) |
20.0%-22.0% |
Decrease |
||||||
|
|
Market Approach |
Comparable Companies |
Earnings Multiple |
1.3x-1.6x |
Increase |
||||||||
|
|
|||||||||||||
|
High Yield |
$ |
1,998,200 |
Income Approach |
Discounted Cash Flow |
Yield (Discount Rate of Cash Flows) |
9.0%-11.0% |
Decrease |
||||||
|
Structured Credit |
|
||||||||||||
|
Asset-Backed Securities |
$ |
6,592,813 |
Market Approach |
Market Comparables |
Market Quotes |
$97.6 |
Increase |
||||||
|
|
Income Approach |
Discounted Cash Flow |
Yield (Discount Rate of Cash Flows) |
6.0%-15.0% |
Decrease |
||||||||
|
Commercial Mortgage-Backed Securities |
$ |
34,861 |
Market Approach |
Market Comparables |
Market Quotes |
$0.10 |
Increase |
||||||
|
|
|
Income Approach |
Discounted Cash Flow |
Yield (Discount Rate of Cash Flows) |
12.0%-14.0% |
Decrease |
|||||||
|
Total |
$ |
144,661,725 |
|||||||||||
____________
(1) The impact represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.
|
2026 Semi-Annual Report |
59 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
The following is a reconciliation of the assets in which significant unobservable inputs (Level 3) were used in determining fair value:
|
|
Private |
Corporate |
Structured |
Emerging |
Total |
|||||||||||||||
|
Balance as of December 31, 2025 |
$ |
104,079,155 |
|
$ |
1,816,376 |
|
$ |
3,846,276 |
|
$ |
473,524 |
|
$ |
110,215,331 |
|
|||||
|
Accrued discounts (premiums) |
|
86,251 |
|
|
60,445 |
|
|
8,065 |
|
|
121 |
|
|
154,882 |
|
|||||
|
Realized gain |
|
1,140,122 |
|
|
12 |
|
|
9,706 |
|
|
6,103 |
|
|
1,155,943 |
|
|||||
|
Change in unrealized depreciation |
|
(2,161,293 |
) |
|
(83,393 |
) |
|
(32,202 |
) |
|
(6,224 |
) |
|
(2,283,112 |
) |
|||||
|
Purchases at cost/corporate actions |
|
64,100,552 |
|
|
2,036,083 |
|
|
7,221,657 |
|
|
— |
|
|
73,358,292 |
|
|||||
|
Sales proceeds |
|
(32,094,671 |
) |
|
(945,588 |
) |
|
(4,425,828 |
) |
|
(473,524 |
) |
|
(37,939,611 |
) |
|||||
|
Transfers into Level 3 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||||
|
Balance as of June 30, 2026 |
$ |
135,150,116 |
|
$ |
2,883,935 |
|
$ |
6,627,674 |
|
$ |
— |
|
$ |
144,661,725 |
|
|||||
|
Change in unrealized depreciation for Level 3 assets still held at the reporting date |
$ |
(2,040,189 |
) |
$ |
(125,877 |
) |
$ |
(16,785 |
) |
$ |
— |
|
$ |
(2,182,851 |
) |
|||||
For further information regarding the security characteristics of the Fund, see the Consolidated Schedule of Investments.
Investment Transactions and Investment Income: Securities transactions are recorded on trade date. Realized gains and losses from securities transactions are calculated on the identified cost basis. Interest income is recorded on the accrual basis. Discounts and premiums on securities are accreted and amortized on a daily basis using the effective yield to maturity and yield to next methods, respectively and might be adjusted based on management’s assessment of the collectability of such interest. Dividend income is recorded on the ex-dividend date.
Foreign Currency Transactions: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not isolate the portion of gains or losses resulting from changes in foreign exchange rates on securities from the fluctuations arising from changes in market prices.
Reported net realized foreign exchange gains or losses arise from sales of securities, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid.
Expenses: Expenses directly attributable to the Fund are charged directly to the Fund, while expenses that are attributable to the Fund and other investment companies advised by the Adviser or its affiliates are allocated among the respective investment companies, including the Fund, based either upon relative average net assets, evenly, or a combination of average net assets and evenly.
Certain intermediaries such as banks, broker-dealers, financial advisers or other financial institutions charge a fee for sub-administration, sub-transfer agency and other shareholder services associated with shareholders whose shares are held in omnibus, other group accounts or accounts traded through registered securities clearing agents. The portion of this fee paid by the Fund is included within “Transfer agent fees” in the Consolidated Statement of Operations.
Distributions to Shareholders: The Fund declares and pays dividends quarterly from net investment income. To the extent these distributions exceed net investment income, they may be classified as return of capital. The Fund also pays distributions at least annually from its net realized capital gains, if any. Dividends and distributions are recorded on the ex-dividend date. All common shares have equal dividend and other distribution rights. A notice disclosing the source(s) of a distribution is provided after a payment is made from any source other than net investment income.
|
60 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
This notice is available on the Fund’s website at https://privatewealth.brookfield.com/fund/oaktree-diversified-income-fund-inc. Any such notice is provided only for informational purposes in order to comply with the requirements of Section 19(a) of the 1940 Act and not for tax reporting purposes. The tax composition of the Fund’s distributions for each calendar year is reported on IRS Form 1099-DIV.
Dividends from net investment income and distributions from realized gains from investment transactions have been determined in accordance with Federal income tax regulations and may differ from net investment income and realized gains recorded by the Fund for financial reporting purposes. These differences, which could be temporary or permanent in nature, may result in reclassification of distributions; however, net investment income, net realized gains and losses and net assets are not affected.
When Issued, Delayed Delivery Securities and Forward Commitments: The Fund may enter into forward commitments for the purchase or sale of securities, including on a “when issued” or “delayed delivery” basis, in excess of customary settlement periods for the type of security involved. In some cases, a forward commitment may be conditioned upon the occurrence of a subsequent event, such as approval and consummation of a merger, corporate reorganization or debt restructuring (i.e., a when, as and if issued security). When such transactions are negotiated, the price is fixed at the time of the commitment, with payment and delivery taking place in the future, generally a month or more after the date of the commitment. While it will only enter into a forward commitment with the intention of actually acquiring the security, the Fund may sell the security before the settlement date if it is deemed advisable. Securities purchased under a forward commitment are subject to market fluctuation, and no interest (or dividends) accrues to the Fund prior to the settlement date. The Fund will segregate with its custodian cash or liquid securities in an aggregate amount at least equal to the amount of its outstanding forward commitments.
Investments in Real Estate: The Fund may invest a portion of its assets in public and/or private debt investments and other real estate assets or real estate-related securities and obligations. The value of these debt investments and whether and to what extent such investments perform as expected will depend, in part, on the prevailing conditions in the market for real estate investment generally and, in particular, on the value of the underlying real estate asset collateral or real estate-related companies to which such debt investments relate. The real estate industry is cyclical in nature, and a deterioration of real estate fundamentals in the markets in which the Fund invests will have an adverse effect on the performance of the Fund’s investments. The value of real estate assets and real estate-related investments can fluctuate for various reasons. Real estate values can be seriously affected by interest rate fluctuations, changes in general and local economic conditions, bank liquidity, the availability of financing, changes in environmental and zoning laws, overbuilding and increased competition, changes in supply and demand fundamentals, an increase in property taxes, casualty or condemnation losses, bankruptcy or financial difficulty of a major tenant, regulatory limitations on rent, increased mortgage defaults and the availability of mortgage funds which may render the sale or refinancing of properties difficult or impracticable. Reductions in value or cash flow could impair the Fund’s ability to make distributions to Common Shareholders, adversely impact its ability to effectively achieve its investment objective and reduce overall returns on investments.
Investments in Real Estate Loans: While the Fund intends to invest primarily in “performing” real estate debt securities, real estate loans underlying the securities acquired by the Fund may be non-performing at the time of their acquisition and/or may become non-performing following their acquisition for a wide variety of reasons. Such non-performing real estate loans may require a substantial amount of workout negotiations and/or restructuring, which may entail, among other things, a substantial reduction in the interest rate and a substantial writedown of the principal of such loan. However, even if a restructuring were successfully accomplished, a risk exists that, upon maturity of such real estate loan, replacement “takeout” financing will not be available. Purchases of participations in real estate loans raise many of the same risks as investments in real estate loans and also carry risks of illiquidity and lack of control.
Collateralized Loan Obligations (“CLOs”): The Fund may invest in CLOs and other securitizations, which are generally limited recourse obligations of the issuer (“Securitization Vehicles”) payable solely from the underlying assets (“Securitization Assets”) of the issuer or proceeds thereof. Holders of equity or other securities issued by Securitization Vehicles must rely solely on distributions on the Securitization Assets or proceeds thereof for payment in respect thereof. Consequently, the Fund will typically not have any direct rights against the issuer of, or the entity that sold, assets underlying the securitization. The Securitization Assets may include, without limitation, broadly syndicated leverage loans, middle-market bank loans, CDO debt tranches, trust preferred securities, insurance
|
2026 Semi-Annual Report |
61 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
surplus notes, asset-backed securities, mortgages, REITs, high-yield bonds, mezzanine debt, second-lien leverage loans, credit default swaps and emerging market debt and corporate bonds, which are subject to liquidity, market value, credit, interest rate, reinvestment and certain other risks.
The Fund operates as a single operating segment. The Fund’s income, expenses, assets, and performance are regularly monitored and assessed as a whole by the President of the Fund, who is responsible for the oversight functions of the Fund, using the information presented in the consolidated financial statements and consolidated financial highlights.
The Fund adopted FASB Accounting Standards Update 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments enhance income tax disclosures by requiring greater disclosure of income taxes paid by jurisdiction. During the period ended June 30, 2026, the Fund did not pay any foreign or U.S. federal, state or local income taxes and therefore did not include any additional disclosures in these financial statements.
3. Derivative Financial Instruments
The Fund may purchase and sell derivative instruments such as exchange-listed and over-the counter put and call options on securities, financial futures, equity, fixed-income and interest rate indices, and other financial instruments. It may purchase and sell financial futures contracts and options thereon. Moreover, the Fund may enter into various interest rate transactions such as swaps, caps, floors or collars and enter into various currency transactions such as forward currency contracts, currency futures contracts, currency swaps or options on currency or currency futures or credit transactions and credit default swaps. The Fund may also purchase derivative instruments that combine features of several of these instruments. The Fund may invest in, or enter into, derivatives for a variety of reasons including to hedge certain market risks, to provide a substitute for purchasing or selling particular securities or to increase potential income gain.
Forward Currency Contracts: A forward currency contract (“forward contract”) is an agreement between two parties to buy or sell a currency at an agreed upon price for settlement at a future date. During the period the forward contract is in existence, changes in the value of the forward contract will fluctuate with changes in the currency exchange rates. The forward contract is marked to market daily and these changes are recorded as an unrealized gain or loss. Gain or loss on the purchase or sale of a forward contract is realized on the settlement date.
The Fund invests in forward contracts to hedge against fluctuations in the value of foreign currencies caused by changes in the prevailing currency exchange rates. The use of forward contracts involves the risk that the counterparties may be unable to meet the terms of their contracts and may be negatively impacted from unanticipated movements in the value of a foreign currency relative to the U.S. dollar.
The average quarterly U.S. dollar value of forward currency contracts to be delivered or received during the six months ended June 30, 2026 was $84,629,758, which represents the volume of activity during the period.
Financial Futures Contracts: A futures contract is an agreement between two parties to buy and sell a financial instrument for a set price on a future date. Initial margin deposits are made upon entering into futures contracts and can be either cash or securities. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized gains or losses by “marking-to-market” on a daily basis to reflect the market value of the contract at the end of each day’s trading. Variation margin payments are made or received, depending upon whether unrealized gains or losses are incurred. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract.
The Fund invests in financial futures contracts to hedge against fluctuations in the value of portfolio securities caused by changes in prevailing market interest rates. Should interest rates move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. The Fund is at risk that it may not be able to close out a transaction because of an illiquid market.
|
62 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
The average quarterly notional value of long and short futures contracts outstanding during the six months ended June 30, 2026 were $56,800,526 and $(3,315,576), respectively, which represents the volume of activity during the period.
Credit Default Swap Agreements: Credit default swap agreements may involve greater risks than if the Fund had invested in the reference obligation directly since, in addition to general market risks, credit default swaps are subject to illiquidity risk, counterparty risk and credit risk. A buyer generally also will lose its investment and recover nothing should no credit event occur and the swap is held to its termination date. If a credit event were to occur, the value of any deliverable obligation received by the seller (if any), coupled with the upfront or periodic payments previously received, may be less than the full notional value it pays to the buyer, resulting in a loss of value to the seller. When the Fund acts as a seller of a credit default swap, it is exposed to many of the same risks of leverage described herein since if an event of default occurs, the seller must pay the buyer the full notional value of the reference obligation.
Although the Fund may seek to realize gains by selling credit default swaps that increase in value, to realize gains on selling credit default swaps, an active secondary market for such instruments must exist or the Fund must otherwise be able to close out these transactions at advantageous times. In addition to the risk of losses described above, if no such secondary market exists or the Fund is otherwise unable to close out these transactions at advantageous times, selling credit default swaps may not be profitable for the Fund.
The average monthly notional value of swap contracts outstanding during the six months ended June 30, 2026 was $1,600,000, which represents the volume of activity during the period.
The following table sets forth the fair value of the Fund’s derivative instruments:
|
Derivatives |
Consolidated Statement of Assets and Liabilities |
Value as of June 30, |
||||
|
Assets: |
|
|
||||
|
Forward currency contracts |
Unrealized appreciation on forward currency contracts |
$ |
1,934,498 |
|
||
|
Credit default swap contracts |
Premiums paid for swap contracts |
|
1,409,882 |
|
||
|
Credit default swap contracts |
Unrealized appreciation on swap contracts |
|
201,258 |
|
||
|
Liabilities: |
|
|
||||
|
Forward currency contracts |
Unrealized depreciation on forward currency contracts |
|
(108,994 |
) |
||
|
Futures contracts |
Variation margin on futures contracts |
|
(34,453 |
) |
||
The following table sets forth the effect of derivative instruments on the Consolidated Statement of Operations for the six months ended June 30, 2026:
|
Derivatives |
Location of Gains (Losses) on |
Net Realized Loss |
Net Change in |
|||||||
|
Forward currency contracts |
Forward currency contracts |
$ |
(544,841 |
) |
$ |
2,650,971 |
|
|||
|
Futures contracts |
Futures contracts |
|
(685,324 |
) |
|
(51,672 |
) |
|||
|
Credit default swap contracts |
Swap contracts |
|
(132,754 |
) |
|
176,873 |
|
|||
The Fund has not offset derivative assets and liabilities or financial assets, including cash, that may be received or paid as part of collateral arrangements. There is no enforceable master netting agreement in place that provides the Fund, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.
|
2026 Semi-Annual Report |
63 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
Below is the gross and net information about instruments and transactions eligible for offset in the Consolidated Statement of Assets and Liabilities as well as instruments and transactions subject to an agreement similar to a master netting arrangement:
|
Collateral |
|||||||||||||||||
|
|
Gross |
Gross |
Net Amounts |
Non-Cash |
Collateral |
Net Amount |
|||||||||||
|
Assets: |
|
|
|
|
|
||||||||||||
|
Forward currency contracts |
$ |
1,934,498 |
$ — |
$ |
1,934,498 |
|
$ — |
$ — |
$ |
1,934,498 |
|
||||||
|
Swap contracts |
|
201,258 |
— |
|
201,258 |
|
— |
— |
|
201,258 |
|
||||||
|
Liabilities: |
|
|
|
|
|
||||||||||||
|
Forward currency contracts |
|
108,994 |
— |
|
(108,994 |
) |
— |
— |
|
(108,994 |
) |
||||||
4. Investment Advisory Agreement and Transactions with Related Parties
The Fund has entered into an Investment Advisory Agreement (the “Advisory Agreement”) with the Adviser under which the Adviser is responsible for the management of the Fund’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Fund. The Advisory Agreement provides that the Fund shall pay the Adviser a monthly fee for its services at an annual rate of 1.25% of the Fund’s average daily net assets plus the amount of borrowing for investment purposes (“Managed Assets”).
Pursuant to an operating expense limitation agreement (the “Expense Limitation Agreement”), the Adviser has contractually agreed to waive all or a portion of its investment advisory fees and/or to reimburse certain expenses of the Fund, including organizational expenses and offering costs, to the extent necessary to maintain the Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement (excluding any front-end or contingent deferred sales loads, brokerage commissions and other transactional expenses, acquired fund fees and expenses, interest (including, “Interest Payments on Borrowed Funds”), taxes, and extraordinary expenses, such as litigation; and other expenses not incurred in the ordinary course of the Fund’s business) at no more than 2.35% for Class D shares, 2.85% for Class A shares and Class U shares and 3.10% for Class T shares. The Expense Limitation Agreement will continue until at least April 30, 2027 and may not be terminated by the Fund or the Adviser before such time. Thereafter, the Expense Limitation Agreement may only be terminated or amended to increase the expense cap, provided that in the case of a termination by the Adviser, the Adviser will provide the Board with written notice of its intention to terminate the arrangement prior to the expiration of its then current term. Any waivers and/or reimbursements made by the Adviser are subject to recoupment from the Fund for a period not to exceed three years after the occurrence of the waiver and/or reimbursement, provided that the Fund may only make repayments to the Adviser if such repayment does not cause the Fund’s expense ratio (after the repayment is taken into account) to exceed the lesser of: (1) the expense cap in place at the time such amounts were waived; and (2) the Fund’s current expense cap.
The amount of investment advisory fees waived and/or expenses reimbursed available to be recouped before expiration is $557,714, of which $110,149, $255,729 and $191,836, will expire during the fiscal years ending December 31, 2027, December 31, 2028 and December 31, 2029, respectively. For the six months ended June 30, 2026, the Adviser waived fees of $191,836, which is reflected on the Fund’s Consolidated Statement of Operations.
The Fund has entered into an administration agreement (“Administration Agreement”) with the Administrator and a sub-administration agreement with U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (the “Sub-Administrator”). The Administrator and the Sub-Administrator perform administrative services necessary for the operation of the Fund, including maintaining certain books and records of the Fund and preparing reports and other documents required by federal, state and other applicable laws and regulations, and providing the Fund with administrative office facilities. The Adviser is responsible for any fees due to the Administrator and the Fund is responsible for any fees due to the Sub-Administrator.
Certain officers and/or directors of the Fund are officers and/or employees of the Administrator.
|
64 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
5. Purchases and Sales of Investments
For the six months ended June 30, 2026, purchases and sales of investments (including principal payups and paydowns), excluding short-term securities and U.S. government securities, were $132,881,829 and $152,963,940, respectively.
For the six months ended June 30, 2026, there were no purchases and sales of long-term U.S. Government securities.
6.
The Fund has established a Credit Facility with PNC Bank, National Association for investment purposes subject to the limitations of the 1940 Act for borrowings by registered investment companies. The new Credit Facility stated maturity date is December 3, 2027. The maximum line of credit as of December 31, 2025 for the Fund is $125,000,000. The Fund pays interest in the amount of Base Rate as defined in the Credit Facility agreement plus 0.25% on Base Rate Loans or Adjusted Term SOFR Rate plus 1.25% on SOFR Loans on the amount outstanding and (i) 0.35% commitment fees if the average daily unused amount is greater or equal to 50% of the maximum amount or (ii) 0.25% commitment fees if the average daily unused amount is less than 50% of the maximum amount.
For the six months ended June 30, 2026, the Fund amortized $167,930 in deferred debt issuance costs and is included in the interest expense on credit facility line on the Fund’s Consolidated Statement of Operations.
As of June 30, 2026, the Fund had outstanding borrowings of $111,000,000. For the period ended June 30, 2026, the components of interest and unused commitment fees expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Credit Facility were as follows:
|
Stated interest expense |
$ |
2,705,143 |
|
|
|
Unused commitment fees |
|
28,101 |
|
|
|
Amortization of debt issuance costs |
|
167,930 |
|
|
|
Total interest expense and credit facility fees |
$ |
2,901,174 |
|
|
|
Average stated interest rate |
|
4.95 |
% |
|
|
Average outstanding balance |
$ |
108,745,856 |
|
According to terms of the Credit Facility agreement, the Fund is required to comply with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without limitation, covenants related to maintaining a ratio of total assets (less total liabilities other than senior securities representing indebtedness) to senior securities representing indebtedness of the Fund of not less than 300%. These covenants are subject to important limitations and exceptions that are described in the documents governing the Credit Facility. As of June 30, 2026, the Fund was in compliance with the terms of the Credit Facility.
7. Capital Shares
The Charter authorizes the Fund to issue up to 1,000,000,000 shares of
|
2026 Semi-Annual Report |
65 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
redemption for each class or series. Although the Fund has no present intention of doing so, it could issue a class or series of shares that could delay, defer or prevent a transaction or a change in control of the Fund that might otherwise be in the shareholders’ best interests. Under Maryland law, shareholders generally are not liable for the Fund’s debts or obligations.
All common shares offered will be, upon issuance, duly authorized, fully paid and nonassessable.
8. Repurchase Offers
As a continuously offered, closed-end interval fund, the Fund has adopted a fundamental investment policy to make offers to repurchase Shares in order to provide liquidity to shareholders. No shareholder will have the right to require the Fund to repurchase its Shares, except as permitted by the Fund’s interval fund structure. No public market for the Shares exists, and none is expected to develop in the future. Consequently, shareholders generally will not be able to liquidate their investment other than as a result of repurchases of their Shares by the Fund, and then only on a limited basis.
The Fund has adopted, pursuant to Rule 23c-3 under the 1940 Act, a fundamental policy, which cannot be changed without shareholder approval, requiring the Fund to offer to repurchase at least 5% and up to 25% of its Shares at NAV on a quarterly basis.
During the six months ended June 30, 2026, the Fund completed two quarterly repurchase offers in which the Fund offered to repurchase up to 10% of its outstanding shares. The results of the repurchase offers were as follows:
|
|
Repurchase Offer #1 |
Repurchase Offer #2 |
||
|
Commencement Date |
January 5, 2026 |
April 6, 2026 |
||
|
Repurchase Request Deadline |
February 9, 2026 |
May 11, 2026 |
||
|
Repurchase Pricing Date |
February 9, 2026 |
May 11, 2026 |
||
|
Dollar Amount Repurchased – Class D |
$33,045,985 |
$20,762,809 |
||
|
Shares Repurchased – Class D |
3,647,460 |
2,317,278 |
||
|
Dollar Amount Repurchased – Class A |
N/A |
$— |
||
|
Shares Repurchased – Class A |
N/A |
— |
9. Federal Income Tax Information
The Fund intends to meet the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income or excise tax provision is required. The Fund may incur an excise tax to the extent it has not distributed all of its taxable income on a calendar year basis.
GAAP provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. An evaluation of tax positions taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the taxing authority is required. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be booked as a tax expense in the current year and recognized as: a liability for unrecognized tax benefits; a reduction of an income tax refund receivable; a reduction of a deferred tax asset; an increase in a deferred tax liability; or a combination thereof. As of June 30, 2026, the Fund has determined that there are no uncertain tax positions or tax liabilities required to be accrued.
|
66 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
The Fund has reviewed the taxable years open for examination (i.e. not barred by the applicable statute of limitations) by taxing authorities of all major jurisdictions, including the Internal Revenue Service. As of December 31, 2025, open taxable periods consisted of the taxable periods ended December 31, 2022 through December 31, 2025. No examination of the Fund’s tax returns is currently in progress.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
The tax character of distributions paid for the year ended December 31, 2025 shown below were as follows:
|
Year Ended |
|||
|
Ordinary income |
$ |
24,717,609 |
|
|
Return of capital |
|
3,709,846 |
|
|
Total |
$ |
28,427,455 |
|
At December 31, 2025, the Fund’s most recently completed tax year-end, the components of net assets (excluding paid-in capital) on a tax basis were as follows:
|
Capital loss carryforwards(1) |
$ |
(9,960,989 |
) |
|
|
Distributable earnings |
|
— |
|
|
|
Late year ordinary losses |
|
(1,154,337 |
) |
|
|
Other accumulated gains |
|
27,641 |
|
|
|
Tax basis unrealized appreciation on investments and foreign currency |
|
1,305,210 |
|
|
|
Total tax basis net accumulated losses |
$ |
(9,782,475 |
) |
____________
(1) To the extent that future capital gains are offset by capital loss carryforwards, such gains will not be distributed.
As of December 31, 2025, the Fund had short-term and long-term capital loss carryforwards of $3,352,533 and $6,608,456, respectively. The capital loss carryforwards will not expire. During the taxable year ended December 31, 2025, the Fund did not utilize any capital loss carryforwards.
Federal Income Tax Basis: The federal income tax basis of the Fund’s investments, not including foreign currency translations, at December 31, 2025 was as follows:
|
Cost of Investments |
Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Net Unrealized Appreciation |
|||
|
$408,921,346 |
$13,162,343 |
$(11,857,133) |
$1,305,210 |
Capital Account Reclassifications: Because federal income tax regulations differ in certain respects from GAAP, income and capital gain distributions, if any, determined in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. These differences are primarily due to differing treatments for Section 988 currency. Permanent book and tax differences, if any, will result in reclassifications to paid-in capital or to undistributed capital gains. These reclassifications have no effect on net assets or NAV per share. Any undistributed net income and realized gain remaining at fiscal year end is distributed in the following year.
10.Indemnifications, Commitments and Contingencies
Under the Fund’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for indemnification. The Fund’s maximum exposure under these arrangements is unknown, since this would involve the resolution of certain claims, as well as future claims that may be made, against the Fund. Thus, an estimate of the financial impact, if any, of these arrangements cannot be made at this time. However, based on experience, the Fund expects the risk of loss due to these warranties and indemnities to be unlikely.
|
2026 Semi-Annual Report |
67 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. June 30, 2026 |
In conjunction with the ownership of senior loans, the Fund is party to certain credit agreements, which may require the Fund to extend additional loans to investee companies. Commitments to extend credit include loan proceeds the Fund is obligated to advance, such as delayed draws or revolving credit arrangements. Commitments generally have fixed expiration dates or other termination clauses. Unrealized gains or losses associated with unfunded commitments are recorded in the consolidated financial statements and reflected as an adjustment to the fair value of the related security in the Consolidated Schedule of Investments. The par amount of the unfunded commitments is not recognized by the Fund until it becomes funded. The Fund uses the same investment criteria in making these commitments as it does in making investments. The unfunded liability associated with these credit agreements is equal to the amount by which the contractual loan commitment exceeds the sum of the amount of funded debt and cash held in escrow, if any.
11.Subsequent Events
GAAP requires recognition in the financial statements of the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the Consolidated Statement of Assets and Liabilities. For non-recognized subsequent events that must be disclosed to keep the financial statements from being misleading, the Fund is required to disclose the nature of the event as well as an estimate of its financial effect, or a statement that such an estimate cannot be made.
The Fund completed a quarterly repurchase offer in which the Fund offered to repurchase up to 10% of its outstanding shares on August 10, 2026. The result of the repurchase offer was as follows:
|
|
Repurchase Offer |
|
|
Commencement Date |
July 6, 2026 |
|
|
Repurchase Request Deadline |
August 10, 2026 |
|
|
Repurchase Pricing Date |
August 10, 2026 |
|
|
Dollar Amount Repurchased – Class D |
$11,453,740 |
|
|
Shares Repurchased – Class D |
1,292,747 |
|
|
Dollar Amount Repurchased – Class A |
$— |
|
|
Shares Repurchased – Class A |
— |
Management has evaluated subsequent events in the preparation of the Fund’s consolidated financial statements through the date the financial statements were issued and has determined that there are no additional events that require recognition or disclosure in the consolidated financial statements.
|
68 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. |
The Board of Directors (the “Board,” the members of which are referred to as “Directors”) of Oaktree Diversified Income Fund Inc. (the “Fund”), including the Directors who are not “interested persons” of the Fund (the “Independent Directors”), as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”), considered and approved the continuation of the Investment Advisory Agreement (the “Advisory Agreement”) between the Fund and Oaktree Fund Advisors, LLC (the “Adviser” or “Oaktree”) for a successive one-year period at an in-person meeting held on May 20-21, 2026 (the “Meeting”).
In accordance with Section 15(c) of the 1940 Act, the Board requested, and Oaktree provided, materials relating to the Board’s consideration of whether to approve the continuation of the Advisory Agreement for the Fund. These materials included, among other things: (i) a summary of the services provided to the Fund by Oaktree; (ii) information independently compiled and prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third-party provider of mutual fund data, on fees and expenses of the Fund, as compared with a peer group and/or peer universe of funds, as applicable; (iii) information on the profitability of Oaktree; (iv) information about Oaktree’s general compliance policies and procedures and the services that it provides; (v) any “fall-out” benefits to Oaktree (i.e., ancillary benefits realized by Oaktree from its relationship with the Fund); (vi) information relating to economies of scale; (vii) information on Oaktree’s risk management processes; (viii) information regarding brokerage and soft dollar practices; and (ix) information about the key personnel of Oaktree who are involved in the investment management, administration, compliance and risk management activities with respect to the Fund, as well as current and projected staffing levels and compensation practices. In determining whether to approve the Advisory Agreement, the Board, including the Independent Directors considered a series of factors, to the extent applicable, including the role of Brookfield Public Securities Group LLC (“Brookfield”) as the Fund’s administrator.
In determining whether to approve the continuation of the Advisory Agreement, the Board, including the Independent Directors, considered at the Meeting, and from time to time, as appropriate, factors that it deemed relevant. The following discusses the primary factors relevant to the Board’s decision.
THE NATURE, EXTENT AND QUALITY OF THE SERVICES TO BE PROVIDED BY THE ADVISER. In considering the nature, extent and quality of the services provided by the Adviser to the Fund, the Board considered the responsibilities that the Adviser has to the Fund, including the provision of investment advisory services to the Fund, compliance with the Fund’s investment objectives and strategies, review of brokerage matters (including with respect to trade allocation and best execution), oversight of general fund compliance with federal and state laws, and the implementation of Board directives as they relate to the Fund. The Board also considered the Adviser’s risk assessment and monitoring process, and the Adviser’s current level of staffing and its overall resources, as well as information regarding its investment personnel who provide services to the Fund. The Board also considered the personnel responsible for providing advisory services to the Fund and other key personnel of Oaktree, in addition to the current and projected staffing levels and compensation practices. The Board concluded, based on the Directors’ experience and interaction with Oaktree, that: (i) Oaktree would continue to be able to retain high-quality personnel; (ii) Oaktree has exhibited a high level of diligence and attention to detail in carrying out its advisory and other responsibilities under the Advisory Agreement; (iii) Oaktree and Brookfield have been responsive to requests of the Board; and (iv) Oaktree and Brookfield have kept the Board apprised of developments relating to the Fund and the industry in general. The Board also considered Oaktree’s investment process and philosophy, as well as its responsibilities that include the development and maintenance of an investment program for the Fund that is consistent with the Fund’s investment objectives, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services.
In addition, the Board observed that pursuant to an administration agreement with the Fund (the “Administration Agreement”), Brookfield, an indirect wholly-owned subsidiary of Brookfield Asset Management ULC, provides administrative services reasonably necessary for the Fund’s operations, other than those services that the Adviser provides to the Fund pursuant to the Advisory Agreement, including, among other services, the following: (i) preparing and coordinating reports and other materials to be supplied to the Board; (ii) preparing and/or supervising the preparation of and filing with the applicable regulatory authority of all securities filings, periodic financial reports, prospectuses, statements of additional information, marketing materials, tax returns, shareholder reports and other regulatory reports and filings required of the Fund; (iii) supervising and monitoring the preparation of all required filings necessary to maintain the Fund’s qualification and/or registration to sell shares in all states where the Fund currently does, or intends to do business; (iv) coordinating the preparation, printing and mailing of all materials required to
|
2026 Semi-Annual Report |
69 |
|
OAKTREE DIVERSIFIED INCOME FUND INC. |
be sent to shareholders; (v) coordinating the preparation and payment of Fund-related expenses; (vi) monitoring and overseeing the activities of the Fund’s other service providers; (vii) reviewing and adjusting as necessary the Fund’s daily expense accruals; (viii) monitoring daily, monthly and periodic compliance with respect to the federal and state securities laws; (ix) sending periodic information (i.e., performance figures) to service organizations that track investment company information; and (x) performing such additional services as may be agreed upon by and among the Fund, Brookfield and Oaktree. The Board also noted that, although Brookfield does not receive any compensation from the Fund under the Administration Agreement, Brookfield may receive compensation for its administrative services to the Fund from the Adviser out of its management fees. The Board also observed that Brookfield is responsible for the coordination and oversight of the Fund’s third-party service providers. As a result, in addition to the quality of the advisory services provided by Oaktree pursuant to the Advisory Agreement, the Board also considered the quality of the administrative and other services provided by Brookfield to the Fund pursuant to the Administration Agreement. In connection with the administrative services provided by Brookfield, the Board analyzed the structure and duties of Brookfield’s fund administration and accounting, operations and its legal and compliance departments to determine whether they are adequate to meet the needs of the Fund.
The Board’s conclusion was based, in part, upon the following: (i) a comprehensive description of the investment advisory and other services provided to the Fund; (ii) a list of personnel who furnish such services and a description of their duties and qualifications; (iii) performance data with respect to the Fund, including comparable investment companies and accounts managed by Oaktree; (iv) standardized industry performance data with respect to comparable investment companies and the performance of appropriate recognized indices; (v) recent financial statements of Oaktree and its affiliates, and Brookfield Asset Management ULC and Brookfield Asset Management Ltd., the parent companies of Brookfield; (vi) Oaktree’s and Brookfield’s culture of compliance and their commitment to compliance generally, as well as their risk management processes and attention to regulatory matters; and (vii) Oaktree’s reputation and its experience serving as an investment adviser and the experience of the team of portfolio managers that manage the Fund, as well as its experience serving as an investment adviser to other investment fund and institutional clients. The Board also reviewed Oaktree’s compliance and regulatory history and noted that there were no material regulatory or compliance issues that would potentially prevent Oaktree from effectively serving as the investment adviser to the Fund. The Board concluded that the nature, extent and quality of the overall services provided under the Advisory Agreement, as well as the administrative services provided by Brookfield, were reasonable and appropriate in relation to the management fees and that the quality of services continues to be high.
THE PERFORMANCE OF THE FUND AND THE ADVISER. The Board, including the Independent Directors, also considered the investment performance of the Fund. The Board noted that it regularly reviews the performance of the Fund throughout the year. The Board further noted that, while it monitors performance of the Fund closely, it generally attaches more importance to performance over relatively long periods of time, typically three to five years. The Board considered the investment performance of the Fund in view of its importance to shareholders. In connection with this review, the Board received information regarding the investment performance of the Fund as compared to a group of funds with investment classifications and/or objectives comparable to those of the Fund (“Peer Universe”) and to an appropriate index or combination of indices (the “Benchmark Index”), as well as a focused peer group identified by Brookfield (“Peer Group”). At the Meeting, management also discussed the methodologies used by Broadridge and Brookfield to select the funds included in the Peer Universe and the Peer Group, respectively. The performance information was presented for the periods ended March 31, 2026. The Fund’s performance relative to the median of the Peer Universe and Peer Group is described below.
The Board acknowledged that the Fund commenced investment operations on November 1, 2021, noting that the Fund had less than five years of performance information available.
Oaktree Diversified Income Fund. The Board noted that the Fund’s performance was below the median of its Peer Universe for the one-year and since inception periods, and above the median of its Peer Universe for the three-year period. The Board further noted that the Fund outperformed its Benchmark Index for the one-year, three-year, and since inception periods. In addition, the Board considered that the Fund’s performance was above the median of its Peer Group for the quarter ended March 31, 2026.
|
70 |
|
|
OAKTREE DIVERSIFIED INCOME FUND INC. |
THE COST OF THE ADVISORY SERVICES, AND THE PROFITABILITY TO THE ADVISER AND ITS AFFILIATES FROM THEIR RELATIONSHIP WITH THE FUND. The Board also received information regarding the management fees to be paid by the Fund to Oaktree pursuant to the Advisory Agreement. The Board examined this information in order to determine the reasonableness of the fees in light of the nature and quality of services to be provided and any potential additional benefits to be received by Oaktree, Brookfield or their affiliates in connection with providing such services to the Fund.
To assist in analyzing the reasonableness of the management fees for the Fund, the Board received reports independently prepared by Broadridge. The reports showed comparative fee and expense information for the Fund’s expense group (“Expense Group”) and expense universe (“Expense Universe”), including rankings within each category, as determined by Broadridge in collaboration with Brookfield. In considering the reasonableness of the management fees to be paid by the Fund to Oaktree, the Board was presented with a number of expense comparisons, including: (i) contractual and actual management fees; and (ii) actual total operating expenses. In considering the Fund’s total operating expenses, the Board also considered the level of fee waivers and expense reimbursements, as applicable, and the net expense caps contractually agreed upon by Oaktree with respect to the Fund. The Board acknowledged that it was difficult to make precise comparisons with other funds in the Expense Group and Expense Universe since the exact nature of services provided under the various fund agreements is often not apparent. The Board noted, however, that the comparative fee information provided by Broadridge as a whole was useful in assessing whether Oaktree was providing services at a cost that was competitive with other, similar funds. The Fund’s fee and expense rankings are discussed below relative to the median of the applicable expense grouping. In reviewing the expense rankings, the Board noted that a fund with fees and expenses that were below the median had fees and expenses that were less than the median fees and expenses of its peer group, while a fund with fees and expenses that were above the median had fees and expenses that were higher than the median fees and expenses of its peer group. The fund with the lowest expenses is ranked first and the fund with the highest expenses is ranked last within the applicable expense grouping.
Oaktree Diversified Income Fund. The Board considered and took note of the following with respect to the Fund: (i) the Fund’s actual total expenses for common and leveraged assets were below the median of its Expense Group and above the median of its Expense Universe; (ii) the Fund’s actual total expenses for only common assets were below the median of its Expense Group and above the median of its Expense Universe; (iii) the Fund’s actual management fees for common and leveraged assets were below the median of its Expense Group and above the median of its Expense Universe; and (iv) the Fund’s actual management fees for only common assets were below the median of its Expense Group and above the median of its Expense Universe.
The Board was also asked to consider the management fees received by Oaktree with respect to other funds and accounts with similar investment strategies to the Fund, which include institutional and separately managed accounts. In comparing these fees, the Board considered certain differences between these accounts and the Fund, including the broader and more extensive scope of services provided to the Fund in comparison to institutional or separately managed accounts; the greater financial, regulatory and reputational risks in managing the Fund; and the impact on Oaktree and expenses associated with the more extensive regulatory regime to which the Fund is subject as compared to institutional or separately managed accounts.
The Board also considered Oaktree’s profitability and the benefits Oaktree and its affiliates received from their relationship with the Fund. The Board noted that the Adviser had entered into a contractual expense limitation waiver for the Fund, in order to limit the Fund’s net operating expenses. The Board then reviewed financial information relating to Oaktree and its affiliates, including their financial condition and profitability. The Board also considered whether Oaktree had the financial resources necessary to continue to attract and retain high-quality investment management personnel and to provide high-quality services. Additionally, the Board considered the reasonableness of the management fees payable under the Advisory Agreement and took into account that the fees were consistent with management fees that Oaktree charged to comparable funds.
The Board concluded that Oaktree and Brookfield had the financial resources necessary to perform their obligations under the Advisory Agreement and the Administration Agreement, respectively, and to continue to provide the Fund with the high-quality services provided in the past. The Board also concluded that the management fees were reasonable in light of the factors discussed above.
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2026 Semi-Annual Report |
71 |
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OAKTREE DIVERSIFIED INCOME FUND INC. |
THE EXTENT TO WHICH ECONOMIES OF SCALE WILL BE REALIZED AS THE FUND GROWS AND WHETHER FEE LEVELS REFLECT THOSE ECONOMIES OF SCALE. The Board, including the Independent Directors, considered whether shareholders would benefit from economies of scale and whether there was potential for future realization of economies of scale with respect to the Fund. The Board considered that, as a result of being part of the Brookfield Fund Complex,1 the constituent funds, including the Fund, share common resources and may share certain expenses, and if the size of the complex increases, the Fund could incur lower expenses than it otherwise would achieve as a stand-alone entity. The Board noted, however, that although shareholders might benefit from lower operating expenses as a result of an increasing amount of assets spread over the fixed expenses of the Fund, the Fund’s expense limitation agreement with the Adviser served to limit the Fund’s expenses until the Fund had the opportunity to grow its assets. The Board concluded that the management fee structure was reasonable in light of the factors discussed above.
OTHER FACTORS. In consideration of the Advisory Agreement, the Board also received information regarding Oaktree’s brokerage and soft dollar practices. The Board noted that, although Oaktree currently does not have any soft dollar arrangements in place, it follows the soft dollar practices and recordkeeping rules as promulgated under Section 28(e) of the Securities Exchange Act of 1934, as amended, and Rule 204-2 under the Investment Advisers Act of 1940, as amended. The Board considered that Oaktree is responsible for decisions to buy and sell securities for the Fund, selection of broker-dealers and negotiation of commission rates. The Board noted that it receives reports from Brookfield that include information on brokerage commissions and execution throughout the year. The Board then considered other benefits that may be realized by Oaktree from its relationship with both Brookfield and the Fund. Among them, the Board recognized the opportunity to provide advisory services to additional funds and accounts and the reputational benefits. The Board also considered that Oaktree and Brookfield manage their investment operations independently of each other subject to an information barrier between the firms. The Board concluded that the benefits that may accrue to the Adviser by virtue of the Adviser’s relationship to the Fund were fair and reasonable in light of the costs of providing investment advisory services to the Fund and the ongoing commitment of Brookfield and Oaktree to the Fund.
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1 As of the date of the Meeting, the Brookfield Fund Complex was comprised of Brookfield Investment Funds (5 series of underlying portfolios), Brookfield Real Assets Income Fund, Inc. (NYSE: RA), Brookfield Infrastructure Income Fund Inc., Oaktree Diversified Income Fund Inc. and Oaktree Asset-Backed Income Fund Inc. (the “Brookfield Fund Complex”). Following the close of business on June 30, 2026, Brookfield Global Listed Real Estate Fund and Brookfield Next Generation Infrastructure Fund, each a series of Brookfield Investment Funds, were liquidated.
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72 |
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The Fund intends to distribute substantially all of its net investment income to shareholders in the form of dividends. The Fund intends to declare and pay distributions quarterly from net investment income. In addition, the Fund intends to distribute any net capital gains earned from the sale of portfolio securities to shareholders no less frequently than annually. Net short-term capital gains may be paid more frequently. Unless Common Shareholders specify otherwise, dividends will be reinvested in Shares of the Fund in accordance with the Fund’s dividend reinvestment plan. The Fund may pay distributions from sources that may not be available in the future and that are unrelated to the Fund’s performance, such as from offering proceeds and/or borrowings.
The Fund has adopted a Dividend Reinvestment Plan (the “Plan”) that provides that, unless Common Shareholders elect to receive their distributions in cash, they will be automatically reinvested by U.S. Bancorp Fund Services, LLC (the “Plan Administrator”), in additional Shares. If Common Shareholders elect to receive distributions in cash, they will receive them paid by check mailed directly to them by the Plan Administrator. The Plan Administrator can be contacted through mail by writing to U.S. Bancorp Fund Services, LLC, P.O. Box 701, Milwaukee, Wisconsin 53201-0701 or by phone at 1-855-862-5873.
Shares received under the Plan will be issued to Common Shareholders at their NAV on the ex-dividend date; there is no sales or other charge for reinvestment. Common Shareholders are free to withdraw from the Plan and elect to receive cash at any time by giving written notice to the Plan Administrator or by contacting the broker or dealer, who will inform the Fund.
The Plan Administrator provides written confirmation of all transactions in the shareholder accounts in the Plan, including information Common Shareholders may need for tax records. Any proxy Common Shareholders receive will include all Shares received under the Plan.
Automatically reinvested dividends and distributions are taxed in the same manner as cash dividends and distributions.
The Fund and the Plan Administrator reserve the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. If the Plan is amended to include such service charges, the Plan Administrator will include a notification to registered holders of Shares with the Plan Administrator.
Additional information about the Plan may be obtained from the Plan Administrator.
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2026 Semi-Annual Report |
73 |
Oaktree Fund Advisors, LLC, on its own behalf and on behalf of the funds managed by Oaktree Fund Advisors, LLC and its affiliates, recognizes and appreciates the importance of respecting the privacy of our clients and shareholders. Our relationships are based on integrity and trust and we maintain high standards to safeguard your non-public personal information (“Personal Information”) at all times. This privacy policy (“Policy”) describes the types of Personal Information we collect about you, the steps we take to safeguard that information and the circumstances in which it may be disclosed.
If you hold shares of the Fund through a financial intermediary, such as a broker, investment adviser, bank or trust company, the privacy policy of your financial intermediary will also govern how your Personal Information will be shared with other parties.
WHAT INFORMATION DO WE COLLECT?
We collect the following Personal Information about you:
• Information we receive from you in applications or other forms, correspondence or conversations, including but not limited to name, address, phone number, social security number, assets, income and date of birth.
• Information about transactions with us, our affiliates, or others, including but not limited to account number, balance and payment history, parties to transactions, cost basis information, and other financial information.
• Information we may receive from our due diligence, such as your creditworthiness and your credit history.
WHAT IS OUR PRIVACY POLICY?
We may share your Personal Information with our affiliates in order to provide products or services to you or to support our business needs. We will not disclose your Personal Information to nonaffiliated third parties unless 1) we have received proper consent from you; 2) we are legally permitted to do so; or 3) we reasonably believe, in good faith, that we are legally required to do so. For example, we may disclose your Personal Information with the following in order to assist us with various aspects of conducting our business, to comply with laws or industry regulations, and/or to effect any transaction on your behalf;
• Unaffiliated service providers (e.g. transfer agents, securities broker-dealers, administrators, investment advisors or other firms that assist us in maintaining and supporting financial products and services provided to you);
• Government agencies, other regulatory bodies and law enforcement officials (e.g. for reporting suspicious transactions);
• Other organizations, with your consent or as directed by you; and
• Other organizations, as permitted or required by law (e.g. for fraud protection).
When we share your Personal Information, the information is made available for limited purposes and under controlled circumstances designed to protect your privacy. We require third parties to comply with our standards for security and confidentiality.
HOW DO WE PROTECT CLIENT INFORMATION?
We restrict access to your Personal Information to those persons who require such information to assist us with providing products or services to you. It is our practice to maintain and monitor physical, electronic, and procedural safeguards that comply with federal standards to guard client nonpublic personal information. We regularly train our employees on privacy and information security and on their obligations to protect client information.
CONTACT INFORMATION
For questions concerning our Privacy Policy, please contact our client services representative at 1-855-777-8001.
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CORPORATE INFORMATION |
Investment Adviser
Oaktree Fund Advisors, LLC
333 South Grand Avenue, 28th Floor
Los Angeles, California 90071
www.oaktreefunds.com
Administrator
Brookfield Public Securities Group LLC
Brookfield Place
225 Liberty Street, 35th Floor
New York, New York 10281
www.brookfield.com
Please direct your inquiries to:
Investor Relations
Phone: 1-855-777-8001
E-mail: privatewealth@brookfield.com
Transfer Agent
Shareholder inquiries relating to distributions, address changes and shareholder account information should be directed to the Fund’s transfer agent:
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
1-855-862-5873
Fund Accounting Agent & Sub-Administrator
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
111 South Wacker Drive
Chicago, Illinois 60606
Legal Counsel
Paul Hastings LLP
200 Park Avenue
New York, New York 10166
Custodian
U.S. Bank National Association
1555 North RiverCenter Drive, Suite 302
Milwaukee, Wisconsin 53212
Distributor
Quasar Distributors, LLC
190 Middle Street, Suite 301
Portland, ME 04101
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Directors of the Fund |
Chair of Board of Directors |
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Officers of the Fund |
President |
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.
You may obtain a description of the Fund’s proxy voting policies and procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request by calling 1-855-777-8001, or go to the SEC’s website at www.sec.gov.
(b) Not applicable.
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable to registrants that are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).
Item 6. Investments.
(a) Schedule of Investments is included as part of the report to shareholders filed under Item 1(a) of this Form.
(b) Not applicable.
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.
Not applicable to closed-end investment companies.
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.
Not applicable to closed-end investment companies.
Item 9. Proxy Disclosure for Open-End Management Investment Companies.
Not applicable to closed-end investment companies.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.
Not applicable to closed-end investment companies.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
Statement Regarding Basis for Approval of Investment Advisory Contract is included as part of the report to stockholders filed under Item 1(a) of this Form.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
(a) Not applicable for semi-annual reports.
(b) Not applicable.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 15. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors.
Item 16. Controls and Procedures.
(a) The Registrant’s Principal Executive Officer and Principal Financial Officer have reviewed the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 18. Recovery of Erroneously Awarded Compensation.
(a) Not applicable.
(b) Not applicable.
Item 19. Exhibits.
(a) (1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not applicable.
(2) Any policy required by the listing standards adopted pursuant to Rule 10D-1 under the Exchange Act (17 CFR 240.10D-1) by the registered national securities exchange or registered national securities association upon which the registrant’s securities are listed. Not applicable.
(4) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.
(5) Change in the registrant’s independent public accountant. Provide the information called for by Item 4 of Form 8-K under the Exchange Act (17 CFR 249.308). Unless otherwise specified by Item 4, or related to and necessary for a complete understanding of information not previously disclosed, the information should relate to events occurring during the reporting period. Not applicable.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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(Registrant) |
Oaktree Diversified Income Fund Inc. |
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By (Signature and Title) |
/s/ Brian F. Hurley |
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Brian F. Hurley, Principal Executive Officer |
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Date |
September 3, 2026 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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By (Signature and Title) |
/s/ Brian F. Hurley |
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Brian F. Hurley, Principal Executive Officer |
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Date |
September 3, 2026 |
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By (Signature and Title) |
/s/ Casey P. Tushaus |
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Casey P. Tushaus, Principal Financial Officer |
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Date |
September 3, 2026 |
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