The Ryland Group, Inc. (NYSE: RYL) and Oaktree Capital have formed a venture to acquire and develop distressed residential real estate projects, Ryland announced Monday.

"We are excited about the opportunities that will arise as a result of this partnership," said Chad Dreier, Ryland's chairman and CEO. "With more than $55 billion in assets under management, Oaktree is one of the premier investment managers in the country. Their considerable capital base and strong track record as an investor in distressed assets make Oaktree an ideal partner for us."

An Executive Committee, comprised of representatives from both firms, will make purchase decisions. The Company will then provide the necessary improvements and permits with the intent to ultimately sell the projects as finished lots. The Ryland Group will have the right to option all lots sold by the partnership.

No name was announced for the partnership, which will be structured as an LLC. Its stated purpose will be to "take advantage of the current dislocation in the residential real estate market."

Oaktree, based in Los Angeles, employs an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, real estate, high yield and convertible bonds, specialized private equity, emerging market and Japanese securities, and mezzanine finance.