I have learnt that Oaktree is among a small number of bidders for Countryside Properties, one of the biggest privately-held housebuilders in the UK.
The talks are still some time away from resulting in a formal agreement for Oaktree to acquire Countryside, and other bidders are understood to be waiting in the wings if the discussions falter, insiders have said.
The other principal remaining bidder is Patron Capital, according to insiders.
JP Morgan Cazenove, the investment bank, was appointed last May to oversee a sale process, since when a slew of Government stimulus packages have resulted in a sharp upturn in fortunes for the housebuilding sector.
Crest Nicholson, one of the biggest players in the industry, is eyeing a return to the stock market, in a move that will underline returning investor confidence.
Lloyds inherited many of its interests in housebuilders when it rescued HBOS during the banking crisis of 2008. HBOS was hugely exposed to the industry, having paid over the odds for many of the stakes during the boom years earlier in the decade.
Patron is the frontrunner to acquire Cala.
Oaktree has a big presence in Europe and is currently in talks about offloading a number of companies in its portfolio, including Stock Spirits, the Eastern European alcoholic beverages producer, and R&R Ice Cream, the British ice cream-maker.
Oaktree could not be reached for comment.