Marks’ Oaktree Capital Buying European Distressed Debt – Source

Marks' Oaktree Capital Buying European Distressed Debt - Source

Oaktree Capital Group LLC (NYSE:OAK) is one of the world’s largest value oriented asset managers. The firm is run by legendary CEO, Howard Marks. With $75 billion under management, the firm just filled for an IPO which gave it a valuation of around $7 billion.

David Einhorn seemed to like this IPO; his hedge Greenlight Capital just bought 1,679,750 shares of the company.

Seth Klarman: Investors Always Need A Strategy To Guide Them

Volatility"Many investors lack a strategy that equips them to deal with a rise in volatility and declining markets," Seth Klarman told his audience in a speech at MIT in 2012. Q3 2020 hedge fund letters, conferences and more Klarman was talking about the benefits of having a strategy, such as value investing, to provide a Read More

Oaktree Capital Group LLC (NYSE:OAK) is legendary for its distressed value purchases. An article in Bloomberg by Gillian Wee last year stated that Oaktree’s  17 distressed-debt funds have averaged annual gains of 19 percent after fees for the past 22 years — about 700 basis points better than its bogey.

It is not surprising that Oaktree is looking for more distressed opportunities, and the best place to find them is Europe.

We spoke to a source who confirmed that Oaktree sees Europe as an attractive place to find investments.

The source stated that due to banks’ resistance to lend opportunities are more abundant for the firm. Clients have also expressed interest to seek higher returns than the low yields offered by domestic securities.

Oaktree Capital is currently looking at these three specific areas for future investments:

  •  the firm’s expanded high yield bond strategy (where they combine allocations to discrete U.S. and European bond portfolios), and
  •  their global high yield bond strategy (where the portfolio is managed as a single mandate and the firm picks the most attractive debt regardless of geography).
  • pure European high yield bond and senior loans strategies

Oaktree joins other value firms that are ramping up European operations. Baupost Group, and Appaloosa are among other value firms, which have been investing heavily in Europe lately.