Oaktree Capital Management
|NYSE: OAK-PA NYSE: OAK-PB|
|Founders||Howard Marks, Bruce Karsh, Larry Keele, Richard Masson, Sheldon Stone |
Los Angeles, California,
Number of locations
(Co-Chairman and CIO)
|AUM||US$158 billion (as of September 30, 2021)|
|Owner||Brookfield Asset Management|
Oaktree Capital Management is an American global asset management firm specializing in alternative investment strategies. As of September 30, 2021, the company managed $158 billion for its clientele.
The firm was co-founded in 1995 by a group that had formerly worked together at the TCW Group starting in the 1980s. On April 12, 2012, Oaktree Capital Group LLC became listed on the NYSE: OAK. On March 13, 2019, Brookfield Asset Management announced that it had agreed to buy 62% of Oaktree Capital Management for approximately $4.7 billion.
The firm is based in Los Angeles, and has over 1,000 employees in offices in 19 cities worldwide (Los Angeles; London; New York City; Hong Kong; Stamford, Connecticut; Tokyo; Luxembourg; Paris; Frankfurt; Singapore; Seoul; Beijing; Amsterdam; Dubai; Houston; Helsinki; Dublin; Shanghai; and Sydney). The company's co-chairman, Howard Marks, is known in the investment community for his letters to investors.
Since its formation in 1995, Oaktree has become the largest distressed-debt investor in the world. In 2008, it raised $10.9 billion for what was the largest-ever distressed debt fund, its Opportunities Fund VIIb. As reported in The Washington Post on June 26, 2011, Oaktree's 17 distressed-debt funds (which do not use leverage) have averaged annual gains of 19% after fees for the past 22 years.
Oaktree's clientele includes 67 of the 100 largest U.S. pension plans, 40 state retirement plans in the United States, over 400 corporations and/or their pension funds, over 300 university, charitable and other endowments and foundations, and 15 sovereign wealth funds. According to the Wall Street Journal, Oaktree has “long been considered a stable repository for pension-fund and endowment money.”
The company's distressed-debt funds are often over-subscribed, and in 2010 Oaktree turned down potential investors due to self-imposed limits on fund size.
Early years (1995–1999)
Oaktree was founded in 1995 by a group of principals who first joined together at the TCW Group in the mid-1980s Within three months of its founding in 1995, “more than 30 TCW clients transferred $1.5 billion in assets to Oaktree.”
Since 1995, Oaktree has created what it refers to as “step-out” strategies, usually coincident with the opening of new offices around the world. Its growth in strategies has largely focused on expanding into European and Asian markets. Between 1997 and 1999, Oaktree created 3 new strategies: Emerging Markets Absolute Return in 1997, European High Yield Bonds in 1999, and Power Opportunities in 1999.
In 2001 Oaktree continued to introduce new "step-out" strategies, starting with Mezzanine Finance. Asia Principal Opportunities (2006) followed, along with European Principal Investments (2006), European Senior Loans (2006), U.S. Senior Loans and Value Opportunities (2007), Global High Yield Bonds (2010), Emerging Markets Equities (2011), and Real Estate Debt (2012).
In 2005 the Securities And Exchange Commission ordered Oaktree to pay a fine, interest, and disgorge profits after the SEC ruled they had "sold securities short" before the five legal business days after a public offering pricing had gone public. Oaktree was required to put in place policies and procedures to prevent violations in the future.
In 2008, the firm raised $11 billion for their distressed debt fund. In 2009, Oaktree was selected by the U.S. Treasury, along with eight other managers (BlackRock, Invesco, AllianceBernstein and others) to participate in the government's Public-Private Investment Program (PPIP). At the time of Oaktree's inclusion in the PPIP program, The New York Times reported: “Howard S. Marks is the sort of financier who Washington hopes will help fix the nation’s tumbledown banks.” As of December 31, 2018, the Oaktree PPIP Fund, L.P. had a gross return of 28%.
In 2009, Oaktree acquired a 20% stake in DoubleLine Capital, a Los Angeles-based investment firm specializing in mortgage-backed fixed income portfolios.
The firm's relationship with Vanguard was expanded in 2011 when Oaktree was selected as one of four firms to manage Vanguard's Emerging Markets Select Stock Fund. In 2010, Oaktree was named one of three advisors to the Russell Global Opportunistic Credit Fund and was selected as a manager for the Credit Suisse (Lux) I Fund in 2011.
In 2017, Eaton Vance launched the Oaktree Diversified Credit NextShares exchange-traded managed fund with Oaktree as subadvisor.
In 2018, Oaktree filed a registration statement to launch a non-traded REIT.
- Other recent funds
According to the company's published financial results, Oaktree raised $12 billion for Oaktree Opportunities Funds X and Xb (“Opps X and Xb”).
- NYSE listing
On April 12, 2012, Oaktree became a publicly traded partnership with shares listed on the NYSE. The company was previously listed on GSTrUE, a private over-the-counter exchange run by Goldman Sachs which officially ceased operations in 2012 after Oaktree, along with Apollo Global Management (in 2011), de-listed and moved to the NYSE.
Acquisition of Control by Brookfield
On March 13, 2019, Brookfield Asset Management announced that it had agreed to buy 62% of Oaktree Capital Management for about $4.7 billion, creating one of the world’s largest alternative money managers. On September 30, 2019, completion of the acquisition of a majority stake by Brookfield Asset Management was announced.
Select past and current investments
- Sky Holding — jet airplane ownership
- Fitness First - Global health club chain. Taken over in partnership with Marathon Asset Management in 2012. Parts of business subsequently sold in whole or in part in 2016-17.
- Verreries de l’Orne à Ecouché (Orne) — glass etching firm — 1 April 2010
- Campofrío Food Group — (24%) European food industry. Sold in 2013.
- Conbipel — (100%) Italian fashion industry
- Quiksilver — American retail sporting company
- Billabong International Ltd. - Australia's largest surfwear company.
- Aleris International — acquired 1 May 2010
- Almatis Group — acquired 2010
- Tribune Company — acquired jointly with JPMorgan Chase and Angelo, Gordon & Co.; acquisition completed July 2012.
- Nine Entertainment Co. — taken over (alongside Apollo Global Management and Goldman Sachs) from CVC Asia Pacific in a refinancing deal in Oct 2012, sold final stake in 2017.
- MediaWorks New Zealand — acquired a controlling 77.8% share in the business, after recently purchasing shares from RBS and Westpac; acquisition completed April 29, 2015.
- SM Caen, Ligue 2 football club in France . Currently hold 80% of the club's shares - acquisition completed in September 2020.
- Zzoomm, UK-based telecommunications company. Majority stake acquired for £100 million in September 2020.
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- "Document". www.sec.gov. Retrieved 2019-07-16.
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- Atlas, Riva (2001). "Company in Trouble? They're Waiting". New York Times. Retrieved 2018-12-24.
- "Finance and Economics: The vultures take wing; Investing in distress". The Economist. March 31, 2007. Retrieved 2012-07-12.
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- Sender, Henry (November 12, 2011). "MF Global reminds us we have much to learn from the crisis". Financial Times. Retrieved 2012-01-12.
- "Oaktree Capital Management Company". International Directory of Company Histories . Reproduced in Business and Company Resource Center. Farmington Hills, Mich.:Gale Group. 2012.
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- Sakoui, Anousha (October 28, 2008). "Distressed debt funds maintain tight secrecy as offerings abound". Financial Times.
- Shieber, Jonathan (November 2011). "PPIP Brings Investors Narrow Opportunities, Nice Returns". The Private Equity Analyst.
- Protess, Ben (January 24, 2011). "Bad Asset Purchase Program Turning a Profit; DealBook". New York Times. Retrieved 2012-07-12.
- Kouwe, Zachery (February 10, 2009). "Washington Hopes 'Vulture' Investors Will Buy Bad Assets". New York Times. Retrieved 2012-07-12.
- Paletta, Damian (July 9, 2009). "Treasury unveils a trimmed down PPIP - Nine fund managers picked for $30 billion program to buy toxic securities; Pimco backs out". Wall Street Journal.
- "Marks's Oaktree Seen Nearing $1 Billion Gain on Gundlach Bet". Bloomberg.com. 2016-02-18. Retrieved 2018-05-23.
- Deng, Chao. "Oaktree Capital's Marks Says Investors Should Insist on 'Low Prices' in Europe". LBO Wire. July 3, 2012.
- Kreutzer, Laura (February 9, 2012). "Washington to Recommend $1B in Private Equity Commitments". LBO Wire.
- Kuo, Patricia (March 6, 2012). "Oaktree Is Said to Raise $4 Billion Fund to Buy Distressed European Assets". Bloomberg. Retrieved 2012-07-12.
- "Global Investment Manager Oaktree Launches $2B Non-Traded REIT". www.bisnow.com. Retrieved 2018-05-23.
- Sender, Henry (May 10, 2007). "Oaktree Capital to try a new twist for share sale; use of Goldman market avoids regulations, doesn't cede control". Wall Street Journal. Retrieved 2012-07-12.
- Sender, Henry (June 18, 2011). "Oaktree Capital Management files for $8bn NYSE listing". Financial Times. Retrieved 2012-07-12.
- Lattman, Peter (April 12, 2012). "Private Goldman Exchange Officially Closes for Business". The New York Times. Retrieved 2012-01-12.
- "Brookfield Asset Management Completes Acquisition of 61.2% of Oaktree Capital Management".
- Sender, Henry (May 17, 2011). "Oaktree Capital Management sows seeds for listing on NYSE". Financial Times. Retrieved 2012-07-12.
- Hausmann, Daniel (2010-04-23). "Carlyle's Flightplan: Betting On An Aviation Recovery". Private Equity Beat. Dow Jones. Retrieved 2010-05-14.
- Thomas, Nathalie (24 May 2014). "Fitness First raises first external debt since restructuring". The Telegraph. Retrieved 11 February 2016.
- "Quadrant expands wellness empire with acquisition of Fitness First Australia". Australasian Leisure Management. 29 September 2016. Retrieved 19 May 2018.
- Tay, Vivienne (24 February 2017). "Celebrity Fitness and Fitness First Asia set to merge". Marketing. Retrieved 19 May 2018.
- Hill, Laura (4 October 2016). "DW Sports Scoops Up Fitness First UK For £70M". Well To Do. Retrieved 19 May 2018.
- "Investissement, mais coupe claire aux Verreries de l'Orne". L'Usine Nouvelle (in French). Antony, Hauts-de-Seine, France. 2010-04-22. Retrieved 2010-05-14.
- Campofrío Food Group[circular reference]
- Bjork, Christopher (2013-11-14). "Mexico's Alfa Makes $937 Million Bid for Campofrio". Wall Street Journal (in American English). ISSN 0099-9660. Retrieved 2018-06-28.
- CONNELLY, LAYLAN (11 February 2016). "Quiksilver, free from bankruptcy, talks booze and boardshorts" (in American English). Retrieved 2016-06-27.
- Fickling, David and Angus Whitley. "Billabong Sees Revival with Oaktree-Centerbridge Debt Plan." Bloomberg
- Nadgir, Santosh (2010-05-13). "Aleris reorganization plan confirmed by court (UPDATE 1)". Reuters. Bangalore. Retrieved 2010-05-14.
- "Almatis Group Files Pre-packaged Chapter 11 Cases to Implement Agreed Financial Restructuring" (Press release). Frankfurt: Almatis Group. 2010-04-30. Retrieved 2010-05-14.
- Marek, Lynne (23 July 2012). "Tribune's bankruptcy exit could mean company breakup". Crain's Chicago Business. Retrieved 1 November 2012.
- "Oaktree Capital sells final stake in Nine Entertainment". The Australian. July 13, 2017.
- "MediaWorks Ownership Update". MediaWorks. 29 April 2015. Retrieved 22 May 2015.
- "Communiqué de Oaktree et Pierre-Antoine Capton". 7 September 2020.
- Nic Fildes (27 September 2020). "Oaktree invests £100m in British broadband". Financial Times. Retrieved 28 September 2020.
- 2011: The Most Important Thing: Uncommon Sense for the Thoughtful Investor by Howard Marks (Columbia University Press, ISBN 978-0231153683)
- 2018: Mastering the Market Cycle: Getting the Odds on Your Side by Howard Marks (Mariner Books, ISBN 978-1328479259)