Man Group announced the first close of its Man Opportunistic Credit Fund III, which is targeting $1.25 billion in total commitments. The firm expects to hold a final close within 12 months of the initial fundraising milestone.

The fund's capital commitment period will end early if it reaches a $1.5 billion hard cap, the company said in a press release.

The fund builds on an opportunistic credit strategy with a track record spanning more than a decade and two previous fund vintages. Led by Jason Dillow, the team invests across both private and public credit markets using a generally unlevered approach.

The strategy focuses primarily on mid-market, off-the-run and other less competitive opportunities, combining steady-return asset pools with direct-to-company financings and bespoke transactions. Its flexible mandate allows the team to shift capital in response to changing market conditions. 

"What continues to resonate most with investors is our focus on smaller companies and capital structures, allowing our seasoned investment team to negotiate bespoke lending arrangements with borrowers where we have trusted relationships. We believe this has led to attractive outcomes for clients. We are incredibly excited about this first close milestone," said Dillow, co-head of U.S. Private Credit and head of U.S. Opportunistic Credit.

Fund Managers Lean Into Opportunistic Credit

Historically, periods of public market dislocation have prompted increased deployment into public credit opportunities, while stronger market environments have typically seen a greater emphasis on private credit investments, the press release stated.

In April, Ares Management raised more than $9.8 billion for its latest opportunistic credit strategy. Craig Snyder, co-head of opportunistic credit at Ares, said at the time that market volatility was creating a “pipeline of attractive opportunities for disciplined managers,” citing the firm’s ability to invest across both public and private markets.

Industry participants say the current environment could favor lenders with broad mandates. In a recent report, private markets law firm Macfarlanes said economic uncertainty, geopolitical tensions and rapid technological change were creating market dislocations that flexible credit investors are seeking to exploit.

The firm said private credit funds that can navigate complex situations and capitalize on structural disruptions are likely to be best positioned as opportunities emerge. More than $100 billion has been raised for opportunistic credit strategies over the past two years, it added, leaving a fresh pool of capital ready to deploy if market stresses deepen.

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