Despite lower fourth-quarter earnings and a relative lack of distressed opportunities, credit specialist Oaktree Capital Group continues to raise a new flagship distressed fund, hoping the vehicle's unusual structure provides some flexibility for the firm should default rates pick up, said executives during a conference call Monday to discuss quarterly financial results.

The Los Angeles firm reported $24.4 million net income for the fourth quarter, down from $64.9 million a year earlier because of lower incentive income.