DEF: Oaktree Specialty Lending Sets 2026 Annual Meeting Agenda

Oaktree Specialty Lending Corporation announces its 2026 Annual Meeting of Stockholders to be held virtually on March 3, 2026, to elect directors and ratify its independent auditor.

Summary

• The 2026 Annual Meeting of Stockholders will be held virtually on March 3, 2026, at 10:00 a.m. Pacific Time (1:00 p.m. Eastern Time).
• Stockholders of record at the close of business on January 5, 2026, are entitled to notice of, and to vote at, the Annual Meeting.
• Stockholders will vote on the election of two directors, John B. Frank and Bruce Zimmerman, who will each serve until the 2029 Annual Meeting of Stockholders.
• Stockholders will also vote to ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending September 30, 2026.
• The Board of Directors recommends voting FOR the election of each director nominee and FOR the ratification of Ernst & Young LLP.
• As of January 5, 2026, the Company had 88,085,523 shares of common stock outstanding.
• Oaktree Capital Holdings, LLC and affiliates beneficially own 7,872,199 shares, representing 8.94% of outstanding common stock as of January 5, 2026.

Sentiment

Score: 6

Explanation: The filing is a routine proxy statement focused on corporate governance and administrative matters. While it discloses potential future changes due to the Brookfield acquisition and inherent conflicts of interest, it also highlights robust governance structures and fee waivers, leading to a neutral to slightly positive sentiment due to proactive governance and transparency.

Positives

• The Board of Directors recommends voting FOR all proposals, indicating internal alignment on key governance matters.
• Independent directors are required to hold Company stock equal to at least the compensation paid in the prior fiscal year, aligning their financial interests with those of shareholders.
• The Company has established robust corporate governance procedures, including regular meetings of independent directors in executive session and committees comprised solely of independent directors.
• The Company, Adviser, and certain affiliates received exemptive relief from the SEC on November 14, 2025, allowing for more flexible co-investment transactions, potentially enhancing investment opportunities.

Negatives

• Non-audit fees paid to Ernst & Young LLP increased significantly from $243,400 in fiscal year 2024 to $450,800 in fiscal year 2025, representing 24.8% of total fees in 2025, up from 15.9% in 2024.
• The Investment Advisory Agreement limits the Adviser's liability and requires the Company to indemnify the Adviser against certain liabilities, which could potentially incentivize riskier behavior by the Adviser.

Risks

• Executive officers and directors, and certain members of the Adviser, serve or may serve as officers, directors, or principals of other Oaktree-managed entities with similar investment mandates, creating potential conflicts of interest in the allocation of investment opportunities.
• Brookfield Corporation is acquiring the remaining 26% interest in Oaktree and its affiliates, expected to close in Q1 2026, which will give Brookfield 100% ownership and the right to appoint a majority of Oaktree's board and assume control, potentially impacting Oaktree's operations and its relationship with the Company.
• While Oaktree has investment allocation guidelines, in instances of limited liquidity, factors may not result in pro rata allocations, or certain funds or accounts may receive allocations where others do not, potentially adversely affecting the Company.
• The Company may invest in different parts of the capital structure of companies where other Oaktree funds hold investments, and if conflicts arise, the Company may remain passive, relying on other investors, and its interests could be subordinated or adversely affected in workout or bankruptcy proceedings.
• Any changes to the SEC's exemptive relief for co-investment transactions or related rules and guidance could impact investment allocations made available to the Company, potentially decreasing its allocation or affecting the allocation process.

Future Outlook

Brookfield Corporation is expected to acquire the remaining 26% interest in Oaktree and its affiliates in the first quarter of 2026, which will result in Brookfield owning 100% of Oaktree and its affiliates and the right to appoint a majority of Oaktree's board and assume control. The Company also received new exemptive relief from the SEC on November 14, 2025, allowing for more flexible co-investment transactions with managed funds and accounts, which could impact future investment allocations.

Management Comments

• "Your vote is very important to us. The Board of Directors recommends that you vote FOR the election of each of the nominees proposed by the Board of Directors and described in the accompanying proxy statement and FOR the proposal to ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm for the Company for the fiscal year ending September 30, 2026." Armen Panossian, Chief Executive Officer
• "No matter how many or few shares in the Company you own, your vote and participation are very important to us." Armen Panossian, Chief Executive Officer

Industry Context

As a business development company (BDC), the Company is externally managed by Oaktree, an affiliate of Brookfield. The upcoming full acquisition of Oaktree by Brookfield signifies a consolidation trend within the asset management industry, potentially impacting the Company's strategic direction and access to resources. The BDC structure also entails specific regulatory requirements for risk management and investment allocation, which are addressed through the Board's oversight and SEC exemptive relief for co-investments.

Comparison to Industry Standards

• The Company's external management structure with Oaktree is common among BDCs, where an external adviser manages the portfolio and operations, similar to peers like Ares Capital Corporation or Golub Capital BDC, Inc.
• The Board's composition, with a majority of independent directors, aligns with Nasdaq listing rules and Investment Company Act requirements for BDCs, ensuring robust governance comparable to other publicly traded BDCs.
• The use of an independent registered public accounting firm like Ernst & Young LLP is standard practice for publicly traded companies and BDCs, ensuring financial statement audits meet regulatory standards.
• The pursuit and receipt of SEC exemptive relief for co-investment transactions is a common strategy for BDCs managed by large asset managers to facilitate efficient capital deployment across affiliated funds, similar to what other BDCs with complex fund structures might seek.

Management Changes

Corporate Governance

Related Party Transactions

• **Investment Advisory Agreement**: The Company is externally managed by Oaktree Fund Advisors, LLC (the Adviser), an Oaktree affiliate. Fees include a base management fee (1.00% of gross assets, excluding cash) and an incentive fee (17.5% of pre-incentive fee net investment income and realized capital gains).
• **Administration Agreement**: Oaktree Administrator, a wholly-owned Oaktree subsidiary, provides administrative services, facilities, and personnel. The Company reimburses Oaktree Administrator for allocable overhead and expenses at cost, including compensation for the Chief Financial Officer, Chief Compliance Officer, and support staff.
• **Brookfield Acquisition**: Brookfield Corporation is acquiring the remaining 26% interest in Oaktree, which will result in Brookfield owning 100% of Oaktree and its affiliates, potentially impacting the relationship and control over the Adviser.
• **Co-Investment Transactions**: The Company may invest alongside other Oaktree-managed funds and accounts, governed by investment allocation guidelines and SEC exemptive relief, which aims for fair and equitable allocation but acknowledges potential conflicts of interest.

Stakeholder Impact

• **Shareholders**: Will vote on key governance matters (director election, auditor ratification). The Brookfield acquisition of Oaktree could impact the long-term strategic direction and management of the Company. Conflicts of interest in investment allocation could potentially affect investment performance.
• **Management/Employees**: Executive officers and key personnel are primarily compensated by Oaktree or its affiliates, with allocable portions reimbursed by the Company. The Brookfield acquisition could influence Oaktree's internal structure and, by extension, the Company's management.
• **Auditors**: Ernst & Young LLP's appointment for FY2026 is subject to stockholder ratification, ensuring continued independent financial oversight.

Next Steps

• Hold the 2026 Annual Meeting of Stockholders virtually on March 3, 2026.
• Stockholders to vote on the election of two directors and the ratification of Ernst & Young LLP as the independent auditor.
• Brookfield's acquisition of the remaining 26% interest in Oaktree is expected to close in Q1 2026.

Key Dates

Recommendation

This is a routine proxy statement primarily focused on corporate governance matters such as director elections and auditor ratification. It does not contain new financial performance data or significant strategic shifts that would warrant a change in investment recommendation. The disclosed risks related to conflicts of interest and the Brookfield acquisition are inherent to the external management structure and have been previously known or are procedural in nature for this type of filing. Investors should maintain their current position and monitor future financial reports and strategic announcements.

Keywords

Oaktree Specialty Lending, OCSL, Proxy Statement, Annual Meeting, Director Election, Ernst & Young, Auditor Ratification, Corporate Governance, Investment Company Act, Business Development Company, BDC, Oaktree Capital, Brookfield, Related Party Transactions, Investment Advisory Agreement, Administration Agreement, Risk Oversight