Oaktree Capital Group LLC (NYSE:OAK) (PINK:OKCMZ)’s founder and chairman, Howard Marks, spoke at Goldman Sachs Financial Services Conference today. The theme of the presentation was Perception and Reality, where he differentiated between the perceptions and realities about his firm. The founder squashes the perception that Oaktree is not growing by citing the $10 billion y-o-y growth in the past six years, excluding acquisitions. The current AUM of the multi faceted investment firm is above $81 billion. He also said that the company is very determined in raising profits for the shareholders, which is evident from steps like stock buybacks and distribution of equity among employees by diluting ownership of founders.
Howard Marks also asserts that Oaktree has expansive growth potential that is not just limited in the US. He talked about the offshore fundraising, market share growth, and addition of new strategies every year. All 47 of Oaktree Capital Group LLC (NYSE:OAK) (PINK:OKCMZ)’s closed-end funds have returned positive in the first three quarters and 35 out of 47 have returned over 8 percent.
The founder also said that the firm will receive carry on its Opps VIIb fund only after the fund has paid back the invested capital and returns to the investors, he expects the fund to reach the point where it recognizes and receives carry in 2013.
Other than the founder’s own glowing recommendation for his company, Morgan Stanley (NYSE:MS) is also overweight on OAK’s shares. MS reiterates its expectation of an increase in dividend payment in Q2 2013. Oaktree Capital Group LLC (NYSE:OAK) (PINK:OKCMZ) has stayed successful in managing the distressed debt strategy and the analysis also expects Oaktree will achieve or outpace its target fundraising for the year. The company has already raised $8.7 billion YTD.
MS is also optimistic about Opps VIIb’s chances of paying the performance fees till Q2 2013. The cash carry payment in mid next year will be a tailwind for OAK shares, and MS estimates an increase in dividend yield of 11 percent in 2013 vs 6 percent in 2012.