Diameter Capital Closes $4.5B Third Dislocation Fund
Diameter Capital Partners LP has closed its third dislocation vehicle, Diameter Dislocation Fund III (DDF III), raising $4.5 billion—surpassing its initial $4.25 billion hard cap when combined with a related vehicle. The fund targets opportunities created by market dislocations, investing across stressed, distressed, and special-situations credit globally. Investor demand was strong and highly diversified, with roughly one-third of commitments coming from new investors to Diameter’s Dislocation strategy.
“We have already invested meaningful capital to take advantage of the opportunities that exist across today’s dynamic global markets,” said Co-Founders and Managing Partners Scott Goodwin and Jonathan Lewinsohn, underscoring the firm’s active deployment posture.
The close of DDF III marks another milestone for New York–based Diameter, which continues to scale its platform across public and private credit markets. The firm now manages $25 billion in assets under management. DDF III’s predecessor, Diameter Dislocation Fund II, closed in 2023 with approximately $2.2 billion in commitments and has been in harvest mode since April 2025.