Why did Oaktree Acquisition report a loss in Q4 2024?

Oaktree Acquisition reported a net income of $1.38 million in Q4 2024, but this was not a loss. However, the company experienced an increase in the net number of nonaccrual loans during the fourth quarter, which could be a concern for investors. Nonaccrual loans occur when a borrower fails to make interest or principal payments on a loan, and an increase in nonaccrual loans can indicate higher credit risk in the portfolio.

1. **Credit Quality Concerns**: The company participated in a new $6.5 billion credit facility, providing significant funding to Integrity Marketing and Everbridge. Despite this, the company faced challenges, including liquidity constraints at Telestream Holdings, which led to both loans being placed on nonaccrual status. This suggests that while the company was actively participating in new investments, it was also facing risks related to the companies in which it was investing.
2. **Non-Accrual Investments**: The number of nonaccrual investments increased to 10 from 9 in the previous quarter and 5 a year ago. This indicates a deteriorating portfolio quality, which could contribute to the reported loss or negative returns in the quarter.
3. **Market Conditions**: The company operated in an elevated interest rate environment, which increased the cost of debt capital for highly levered companies. This could have impacted the company's profitability and cash flows.

In summary, while Oaktree Acquisition did not report a loss in Q4 2024, it did experience an increase in nonaccrual loans and faced challenges with portfolio companies, which could have impacted its financial performance. The company's active investment strategy and participation in new credit facilities may have contributed to these outcomes.