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

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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.

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