Diameter Capital Partners has closed its third dislocation fund with $4.5 billion in new equity commitments, exceeding the initial hard cap and reinforcing strong global investor confidence in the firm’s credit-focused strategy.
The close of Diameter Dislocation Fund III marks a significant expansion of the firm’s capital base, with one-third of the commitments coming from first-time investors participating in the strategy for the first time. The raise includes a related vehicle that helped push total commitments beyond the initial $4.25 billion limit.
The new fund continues Diameter’s approach to investing in market dislocations through stressed, distressed, and special situations. The strategy builds on the firm’s history of identifying opportunities in industry micro cycles that emerge even in stable macro environments.
The fund plans to leverage the firm’s extensive network of industry relationships and specialized sector research to identify opportunities that offer capital solutions and deliver strong, risk-adjusted returns. The firm noted that meaningful capital has already been deployed to capture opportunities across global markets.
Diameter has been steadily scaling its platform across public and private credit markets. Firm-wide assets under management have reached $25 billion. The predecessor vehicle, Diameter Dislocation Fund II, closed in 2023 with approximately $2.2 billion in commitments and entered its harvest period in April 2025. Founded in 2017 by Scott Goodwin and Jonathan Lewinsohn, Diameter manages capital across its flagship hedge fund, a series of delayed draw dislocation funds, and multiple structured credit vehicles from offices in New York, London, and Palm Beach.
KEY QUOTES:
“Exceeding our initial hard cap for this fundraise demonstrates the trust both new and longstanding investors have in Diameter’s experienced team and disciplined approach. We have already invested meaningful capital to take advantage of the opportunities that exist across today’s dynamic global markets. Looking ahead, we will aim to continue to deploy capital with high conviction, speed, certainty of execution, and an acute focus on delivering outsized results for our clients.”
Scott Goodwin and Jonathan Lewinsohn, Co Founders and Managing Partners of Diameter
