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| Oaktree |
Oaktree Capital Management is an American global alternative investment management firm founded in 1995 by Howard Marks, Bruce Karsh, Steven Kaplan, Larry Keele, Richard Masson and Sheldon Stone. The firm is headquartered in Los Angeles, California, and has additional offices in New York City, London, Tokyo, Hong Kong, Singapore, Seoul, Luxembourg, Paris, Frankfurt, Sydney, and Dubai. Oaktree is known for its expertise in distressed debt, high-yield bonds, and convertible securities, as well as its contrarian and value-oriented investment philosophy.
History:
Oaktree Capital Management was founded in 1995 by six partners, including Howard Marks, who had previously worked at TCW Group, a Los Angeles-based investment management firm. Marks had gained a reputation as a skilled investor in distressed debt and high-yield bonds, and he saw an opportunity to build a firm that focused on these areas. The other five partners were also experienced investors who shared Marks' contrarian and value-oriented philosophy.
In its early years, Oaktree raised capital from institutional investors, including pension funds, endowments, and foundations. The firm's first fund, Oaktree Opportunities Fund I, closed in 1996 with $452 million in commitments. The fund was focused on distressed debt investments in the United States.
In the late 1990s, Oaktree expanded its investment focus to include high-yield bonds and convertible securities. The firm also began to invest in non-distressed companies, using its value-oriented approach to identify undervalued securities.
In 2002, Oaktree went public, listing its shares on the New York Stock Exchange under the ticker symbol "OAK." The initial public offering (IPO) raised $880 million, making it one of the largest IPOs in the asset management industry at the time.
In the years that followed, Oaktree continued to grow and diversify its business. The firm launched new funds focused on real estate, private equity, and infrastructure, among other areas. It also expanded its geographic reach, opening offices in Europe, Asia, and Australia.
In 2019, Oaktree announced that it had agreed to be acquired by Brookfield Asset Management, a Canadian alternative asset manager. The deal, which valued Oaktree at approximately $6.5 billion, was completed later that year.
Investment philosophy:
Oaktree is known for its contrarian and value-oriented investment philosophy. The firm seeks to identify opportunities where the market has mispriced assets, and it looks for situations where there is a large gap between an asset's intrinsic value and its market price.
Oaktree's investment process begins with a focus on risk management. The firm's investment professionals seek to understand the potential downside of an investment before considering its potential upside. This approach is designed to help protect investors' capital in the event of a market downturn or other adverse event.
Once the potential risks of an investment have been identified and assessed, Oaktree's investment professionals conduct a deep analysis of the asset and its market. This analysis includes an examination of the asset's financial statements, its competitive position, and its growth prospects. The firm's investment professionals also consider macroeconomic factors and industry trends that could affect the asset's performance.
If the analysis supports an investment, Oaktree's investment professionals will work to negotiate the best possible terms and structure for the investment. The firm typically invests in distressed debt, high-yield bonds, and convertible securities, but it also considers other opportunities, such as equity investments in undervalued companies.
Recent developments:
Since its acquisition by Brookfield, Oaktree has continued to expand its business and pursue new investment opportunities. In 2021, the firm announced that it had raised $15.7 billion for its latest distressed debt fund, Oaktree Opportunities Fund XI.
