The transaction is expected to close in the first quarter of 2022, subject to regulatory approval.
Oaktree, which also owns IFA consolidator Ascot Lloyd, will operate the two businesses independently.
Under the terms of the agreement, Sanlam Wealth will continue to operate under its current brand through the transition period.
A new brand and identity for the division is expected to be announced in the due course.
Sanlam UK chief executive Jonathan Polin will lead the new business along with its key members of its management team.
The insurer said that a new leadership team for the refocussed business will be revealed at an appropriate point.
Commenting on the deal, Polin said: “This will be a new firm with a new purpose and a new way of working, with a refreshed commitment to delivering the very best products and services for our clients.
“We will have greater autonomy to flex to the needs of our people, and I look forward to working with Oaktree to assess and implement the opportunities available to us as we all look to share in the business’s future successes.”
Oaktree managing director Federico Demalde added: “We firmly believe that the award-winning business built by Jonathan and his management team is a strong platform for growth in the fragmented wealth management market.
“Our investment will be targeted at providing excellent products and services for clients, development opportunities for staff and supporting management in the delivery of its innovative acquisition strategy.”
In August this year, Sanlam UK confirmed plans to close down its adviser network business Sanlam Partnerships.
The firm said that the increased scale and systems capacity need to grow a financial adviser network no longer fits with its business model.