Oaktree Capital Q2 Earnings Decline; AUM Hits All-Time High

Howard Marks Oaktree

Oaktree Capital Group LLC (NYSE:OAK) just reported its financial results for the second-quarter showing that its earnings decline, but its assets under management (AUM) reached an all-time high.

Second-quarter financial results

During the second-quarter ended June 30, Oaktree Capital Group LLC (NYSE:OAK) generated an adjusted net income of $0.75 per class A unit, down from $1.75 in the year-ago quarter. According to the investment management firm, its earnings fell due to lower incentive income.

Oaktree Capital Group LLC (NYSE:OAK) said its distributable earnings per Class A unit dropped to $0.64 from $1.94. Its GAAP net income was $31.2 million compared with $56.6 million in the same period a year earlier.

According to the investment management firm, its AUM increased to its highest level of $91.1 billion and fee-generating AUM went up to $77.8 billion.

Oaktree Capital Group LLC (NYSE:OAK) reported that it raised a gross capital of $5.3 billion for the second quarter. According to the investment management first, it was able to produce as trailing twelve-month total gross capital of $16.1 billion, the highest in six years.

In a statement, Howard Marks, chairman of Oaktree Capital Group, LLC said, “Oaktree has never been stronger. Continued performance across our broad array of synergistic investment strategies resulted in year-over-year growth of 19% for AUM and 20% for management fee-generating AUM.”

Deutsche Bank analyst: Oaktree Capital’s results encouraging

In a note to investors, Deutsche Bank Research Analyst, Brian Bedell noted that Oaktree Capital’s adjusted net income of $0.75 per Class A unit beat the $0.67 consensus estimate and their estimate of $0.71.

According to Bedell, the results of Oaktree Capital Group, LLC (NYSE:OAK) are “encouraging to support a modest rebound in the units today” given the underperformance of OAK units year-to-date on reduced expectation for near-term distribution.

Bedell reiterated his Buy rating for Oaktree Capital Group, LLC (NYSE:OAK) with a $60 per share price target.

Oaktree Capital to acquire Highstar Capital

During the period, Oaktree Capital Group, LLC (NYSE:OAK) entered an agreement to acquire the Highstar Capital. The firm specializes in U.S. energy infrastructure, waste management and transportation.

According to Oaktree Capital Group, LLC (NYSE:OAK) explained that Highstar Capital’s investment strategy is complementary to its power strategy opportunity. The investment management firm expects to close the deal today, August 1.

Oaktree Capital Group, LLC (NYSE:OAK) is currently marketing its close-end funds including Oaktree Real Estate Opportunities Fund VII, L.P., Oaktree Mezzanine Fund IV, L.P. and Oaktree Principal Fund VI, L.P.



About the Author

Marie Cabural
Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.