Oaktree Capital Management is using private credit financing from Ares Management and Barings to fund its acquisition of Australian fund manager Perpetual Ltd.’s wealth management arm, according to Bloomberg.

The transaction will be executed through Oaktree-backed AZ Next Generation Advisory (AZ NGA), which the firm acquired in December 2024 in a deal financed by the same lenders through a A$345m private credit facility.

Perpetual’s wealth division, which provides investment and advisory services to retail and high-net-worth clients, will be merged into AZ NGA, creating one of Australia’s largest independent wealth management platforms.

The deal highlights the growing use of private credit in mid-market M&A financing as traditional bank lending remains constrained. It also underscores global investors’ increasing focus on Australia’s A$4.3tn pension and wealth sector, one of the world’s fastest-growing pools of capital.

Oaktree’s move follows a series of consolidation plays in the industry. In July, CC Capital Partners agreed to acquire Insignia Financial for about A$3.3bn ($2.1bn).

Perpetual had previously attempted to sell its wealth and corporate trust businesses to KKR & Co., but the transaction fell through in 2024 after an unforeseen tax issue.

Ares, Barings, and Oaktree declined to comment on the financing package.

The acquisition further strengthens Oaktree’s position in Australia’s financial services sector and reinforces private credit’s growing role in global dealmaking, particularly as alternative lenders continue to fill the funding gap left by traditional banks.

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