Company:Oaktree Capital Management

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Short description: American global asset management firm
Oaktree Capital Management, Inc.
TypePublic
NYSE: OAK.PRA NYSE: OAK.PRB[1]
IndustryFinancial services
FoundedApril 1995; 29 years ago (1995-04)
FoundersHoward Marks, Bruce Karsh, Larry Keele, Richard Masson, Sheldon Stone[2]
Headquarters
Los Angeles , California
,
U.S.
Number of locations
19[3]
Key people
Howard Marks
(co-chairman)
Bruce Karsh
(co-chairman and CIO)
John Frank
(vice chairman)
Jay Wintrob
(CEO)
AUMUS$172 billion (as of March 31, 2023)[4]
OwnerBrookfield Asset Management
Websiteoaktreecapital.com

Oaktree Capital Management is an American global asset management firm specializing in alternative investment strategies. As of March 31, 2023, the company managed $172 billion[4] 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.[5][6] On March 13, 2019, Canada's Brookfield Asset Management announced that it had agreed to buy 62% of Oaktree Capital Management for approximately $4.7 billion.[7][8]

Firm overview

The firm is based in Los Angeles,[9] and has over 1,000 employees[10] in offices in 19 cities worldwide (Los Angeles; New York City ; London; Hong Kong; Stamford, Connecticut, Tokyo, Luxembourg, Paris, Frankfurt, Singapore, Seoul, Beijing; Amsterdam; Dubai; Houston, Helsinki, Dublin, Shanghai and Sydney).[11][12] The company's co-chairman, Howard Marks, is known in the investment community for his letters to investors.[13]

Since its formation in 1995, Oaktree has become the largest distressed-debt investor in the world.[14][15] In 2008, it raised $10.9 billion for what was the largest-ever distressed debt fund, its Opportunities Fund VIIb.[16] 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.[17]

Investor base

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.[18][19][20] According to The Wall Street Journal , Oaktree has "long been considered a stable repository for pension-fund and endowment money."[21][8]

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.[22]

History

1990s

Oaktree was founded in 1995 by a group of principals who first joined together at the TCW Group in the mid-1980s[23] Within three months of its founding in 1995, “more than 30 TCW clients transferred $1.5 billion in assets to Oaktree.”[24][25]

Oaktree has formed various sub-advisory relationships since 1995. In 1996, Oaktree was selected as the sub-advisor for the Vanguard Convertible Securities Fund.[26]

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.[20]

2000s

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).[26][27][20]

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.[28]

In 2008, the firm raised $11 billion for their distressed debt fund.[16][29] In 2009, Oaktree was selected by the U.S. Treasury, along with eight other managers (BlackRock, Invesco, AllianceBernstein and others)[30] to participate in the government's Public-Private Investment Program (PPIP).[31] 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.”[32] As of December 31, 2018, the Oaktree PPIP Fund, L.P. had a gross return of 28%.[27][33][20][8]

2010s

In 2009, Oaktree acquired a 20% stake in DoubleLine Capital, a Los Angeles-based investment firm specializing in mortgage-backed fixed income portfolios.[34]

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.[26]

Seeking investment opportunities created by the European sovereign-debt crisis,[35][36] Oaktree started its European Principal Fund III in November 2011 with committed capital of some €3 billion.[37]

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.[38]

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”).[20]

NYSE listing

On April 12, 2012, Oaktree became a publicly traded partnership with shares listed on the NYSE.[6] The company was previously listed on GSTrUE, a private over-the-counter exchange run by Goldman Sachs[39] which officially ceased operations[40] in 2012 after Oaktree, along with Apollo Global Management (in 2011), de-listed and moved to the NYSE.[41]

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.[7][8] On September 30, 2019, completion of the acquisition of a majority stake by Brookfield Asset Management was announced.[42]

Investment funds

Oaktree's current investment activities are divided across four asset classes: credit, private equity, real assets and listed equities.[8][43]

Select past and current investments

  • Aleris International — acquired 1 May 2010[44]
  • Almatis Group — acquired 2010[45]
  • Billabong - Australia's largest surfwear company.[46]
  • Campofrío Food Group — (24%) European food industry.[47] Sold in 2013.[48]
  • Conbipel — (100%) Italian fashion industry[49]
  • Environmental 360 Solutions — Canadian Environmental Management company[50]
  • Fitness First - Global health club chain. Taken over in partnership with Marathon Asset Management in 2012.[51] Parts of business subsequently sold in whole or in part in 2016-17.[52][53][54]
  • Loews Cineplex Entertainment — jointly acquired by Onex Corporation from Sony Pictures and Universal Studios in 2002. U.S. division was sold in 2004 to The Carlyle Group (in turn merged with AMC Theatres in 2006); Canadian subsidiary merged with Galaxy Entertainment to form Cineplex Galaxy, renamed to Cineplex Entertainment in 2005.
  • Marlin Brands 50% of Marlin Brands with Alceon Group.
  • 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.[55]
  • Nine Entertainment — 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.[56]
  • Quiksilver — American retail sporting company[57]
  • Sky Holding — jet airplane ownership[58]
  • SM Caen, Ligue 2 football club in France . Currently hold 80% of the club's shares - acquisition completed in September 2020.[59]
  • Tribune Company — acquired jointly with JPMorgan Chase and Angelo Gordon; acquisition completed July 2012.[60]
  • Verreries de l’Orne à Ecouché (Orne) — glass etching firm — 1 April 2010[61]
  • Zzoomm, UK-based telecommunications company. Majority stake acquired for £100 million in September 2020.[62]

See also

References

  1. ↑ "UNITED STATES SECURITIES AND EXCHANGE COMMISSION- Oaktree Capital Group, LLC". https://ir.oaktreecapital.com/static-files/952de105-e629-4af8-93f4-9ea8280b3578. 
  2. ↑ "Oaktree Takes Root: Junk Bond Pros Base New Firm on Old Ideas". July 10, 1995. https://www.latimes.com/archives/la-xpm-1995-07-10-fi-22322-story.html. 
  3. ↑ "Oaktree: Contact Us". https://www.oaktreecapital.com/contact-us. 
  4. ↑ 4.0 4.1 Dorbian, Iris (23 June 2023). "Oaktree Capital racks up $2.3bn for inaugural life sciences lending fund". https://www.pehub.com/oaktree-capital-racks-up-2-3bn-for-inaugural-life-sciences-lending-fund/. 
  5. ↑ "About Oaktree". Los Angeles: Oaktree Capital Management. http://www.oaktreecapital.com/about/.  Financial figures as of March 31, 2010.
  6. ↑ 6.0 6.1 Lattman, Peter (April 12, 2012). "Private Goldman Exchange Officially Closes for Business". Business Day: DealBook. 
  7. ↑ 7.0 7.1 "Brookfield to Acquire 62% of Oaktree Capital Management" (in en-us). https://www.nasdaq.com/press-release/brookfield-to-acquire-62-of-oaktree-capital-management-20190313-00526. 
  8. ↑ 8.0 8.1 8.2 8.3 8.4 "Document". https://www.sec.gov/Archives/edgar/data/1403528/000140352819000007/a201810-kdoc.htm. 
  9. ↑ Vincent, Roger (November 14, 2014) "Oaktree Capital agrees to expand offices in downtown Los Angeles" Los Angeles Times
  10. ↑ "Oaktree Capital Management Group, LLC; Oaktree Capital Appoints Marna Whittington to Board of Directors". Investment Weekly News. July 21, 2012. 
  11. ↑ "Oaktree Opens Office in Helsinki, Led by Ex-PineBridge Exec Tomi Langstrom". April 14, 2020. https://www.pehub.com/oaktree-opens-office-in-helsinki-led-by-ex-pinebridge-exec-tomi-langstrom/. 
  12. ↑ "Oaktree Capital- Contact Us". https://www.oaktreecapital.com/contact-us. 
  13. ↑ Lattman, Peter (May 18, 2011). "Oaktree Capital, an Investment Firm, Is Said to Plan Stock Exchange Listing". The New York Times. 
  14. ↑ Atlas, Riva (2001). "Company in Trouble? They're Waiting". The New York Times. https://www.nytimes.com/2001/01/21/business/company-in-trouble-theyacutere-waiting.html. 
  15. ↑ "Finance and Economics: The vultures take wing; Investing in distress". The Economist. March 31, 2007. https://www.economist.com/finance-and-economics/2007/03/29/the-vultures-take-wing. 
  16. ↑ 16.0 16.1 Arnold, Martin (May 17, 2008). "Oaktree Capital raises 11bn for distressed debt fund". Financial Times. https://www.ft.com/content/4b8f70fc-2379-11dd-b214-000077b07658. 
  17. ↑ Wee, Gillian (June 26, 2011). "Marks puts Oaktree Capital Management on path to IPO". The Washington Post. http://www.highbeam.com/doc/1P2-29005332.html. 
  18. ↑ "About Oaktree Capital". https://www.oaktreecapital.com/about. 
  19. ↑ "SEC FILING | Oaktree Capital Group LLC Form 10-K". http://services.corporate-ir.net/SEC.Enhanced/SecCapsule.aspx?c=212597&fid=15474961. 
  20. ↑ 20.0 20.1 20.2 20.3 20.4 "Oaktree Capital Group, LLC" 10-k form.
  21. ↑ 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". The Wall Street Journal. https://www.wsj.com/articles/SB117876274496898000. 
  22. ↑ Cox, Rob (May 19, 2011). "A Balancing Act at Oaktree Capital Management". The New York Times. https://www.nytimes.com/2011/05/19/business/19views.html. 
  23. ↑ Rundle, Rhona (March 16, 1995). "TCW's Junk-Bond Chief, Marks, Others, to Start Their Own Firm -- Departures Are Major Blow and Could be Followed by Client Defections". The Wall Street Journal. 
  24. ↑ Sender, Henry (November 12, 2011). "MF Global reminds us we have much to learn from the crisis". Financial Times. https://www.ft.com/content/00d6770e-0c55-11e1-8ac6-00144feabdc0. 
  25. ↑ "Oaktree Capital Management Company". International Directory of Company Histories. Reproduced in Business and Company Resource Center (Farmington Hills, Mich.:Gale Group). 2012. 
  26. ↑ 26.0 26.1 26.2 "The Oaktree Capital Story". Oaktree Capital. 2009. http://www.Oaktreecapital.com/about/Oaktree-Capital-story.aspx. 
  27. ↑ 27.0 27.1 "Oaktree Capital S1". United States Securities and Exchange Commission. June 17, 2011. https://www.sec.gov/Archives/edgar/data/1403528/000119312511167852/ds1.htm. 
  28. ↑ "Oaktree Capital Management Company, Exchange Act Release No. 51709 (May 19, 2005).". May 19, 2005. Securities and Exchange Commission. https://www.sec.gov/litigation/admin/34-51709.pdf. 
  29. ↑ Sakoui, Anousha (October 28, 2008). "Distressed debt funds maintain tight secrecy as offerings abound". Financial Times. 
  30. ↑ Shieber, Jonathan (November 2011). "PPIP Brings Investors Narrow Opportunities, Nice Returns". The Private Equity Analyst. 
  31. ↑ Protess, Ben (January 24, 2011). "Bad Asset Purchase Program Turning a Profit; DealBook". The New York Times. https://dealbook.nytimes.com/2011/01/24/toxic-asset-purchase-program-turning-a-profit/. 
  32. ↑ Kouwe, Zachery (February 10, 2009). "Washington Hopes 'Vulture' Investors Will Buy Bad Assets". The New York Times. https://www.nytimes.com/2009/02/11/business/economy/11react.html?pagewanted=all. 
  33. ↑ 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". The Wall Street Journal. 
  34. ↑ "Marks's Oaktree Seen Nearing $1 Billion Gain on Gundlach Bet" (in en). Bloomberg.com. 2016-02-18. https://www.bloomberg.com/news/articles/2016-02-18/marks-s-oaktree-seen-nearing-1-billion-gain-with-gundlach-wager. 
  35. ↑ Deng, Chao. "Oaktree Capital's Marks Says Investors Should Insist on 'Low Prices' in Europe". LBO Wire (July 3, 2012). 
  36. ↑ Kreutzer, Laura (February 9, 2012). "Washington to Recommend $1B in Private Equity Commitments". LBO Wire. 
  37. ↑ Kuo, Patricia (March 6, 2012). "Oaktree Is Said to Raise $4 Billion Fund to Buy Distressed European Assets". Bloomberg. https://www.bloomberg.com/news/2012-03-06/Oaktree-Capital-is-said-to-raise-4-billion-fund-to-buy-distressed-european-assets.html. 
  38. ↑ "Global Investment Manager Oaktree Launches $2B Non-Traded REIT". https://www.bisnow.com/national/news/capital-markets/global-investment-manager-oaktree-launches-2b-non-traded-reit-85164. 
  39. ↑ 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". The Wall Street Journal. https://www.wsj.com/articles/SB117876274496898000. 
  40. ↑ Sender, Henry (June 18, 2011). "Oaktree Capital Management files for $8bn NYSE listing". Financial Times. https://ftalphaville.ft.com/2011/06/20/598631/oaktree-files-for-8bn-nyse-listing/. 
  41. ↑ Lattman, Peter (April 12, 2012). "Private Goldman Exchange Officially Closes for Business". The New York Times. https://dealbook.nytimes.com/2012/04/12/private-goldman-exchange-officially-closes-for-business/. 
  42. ↑ "Brookfield Asset Management Completes Acquisition of 61.2% of Oaktree Capital Management". https://finance.yahoo.com/news/brookfield-asset-management-completes-acquisition-121235703.html. 
  43. ↑ Sender, Henry (May 17, 2011). "Oaktree Capital Management sows seeds for listing on NYSE". Financial Times. https://www.ft.com/content/96b652a8-80b9-11e0-85a4-00144feabdc0. 
  44. ↑ Nadgir, Santosh (2010-05-13). "Aleris reorganization plan confirmed by court (UPDATE 1)". Reuters (Bangalore). https://www.reuters.com/article/idUSSGE64C0KT20100513. 
  45. ↑ "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.
  46. ↑ Fickling, David and Angus Whitley. "Billabong Sees Revival with Oaktree-Centerbridge Debt Plan." Bloomberg
  47. ↑ Campofrío Food Group[circular reference]
  48. ↑ Bjork, Christopher (2013-11-14). "Mexico's Alfa Makes $937 Million Bid for Campofrio" (in en-US). The Wall Street Journal. ISSN 0099-9660. https://www.wsj.com/articles/no-headline-available-1384424508. 
  49. ↑ "Conbipel". http://www.conbipel.it/azienda/. 
  50. ↑ "Enviropnmental 360 Solutions Receives Investment from Oaktree Capital Management" (in en-US). FinSmes. August 29, 2021. https://www.finsmes.com/2021/08/environmental-360-solutions-receives-investment-from-oaktree-capital-management.html. 
  51. ↑ Thomas, Nathalie (24 May 2014). "Fitness First raises first external debt since restructuring". The Telegraph. https://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/10853139/Fitness-First-raises-first-external-debt-since-restructuring.html. 
  52. ↑ "Quadrant expands wellness empire with acquisition of Fitness First Australia". Australasian Leisure Management. 29 September 2016. https://www.ausleisure.com.au/news/quadrant-expands-wellness-empire-with-aquisition-of-fitness-first-australia/. 
  53. ↑ Tay, Vivienne (24 February 2017). "Celebrity Fitness and Fitness First Asia set to merge". Marketing. http://www.marketing-interactive.com/celebrity-fitness-fitness-first-asia-now-parent-company/. 
  54. ↑ Hill, Laura (4 October 2016). "DW Sports Scoops Up Fitness First UK For £70M". Well To Do. https://www.welltodoglobal.com/dw-sports-scoops-up-fitness-first-uk-for-70m/. 
  55. ↑ "MediaWorks Ownership Update". MediaWorks. 29 April 2015. http://www.mediaworks.co.nz/MediaWorks-Ownership-Update/tabid/1578/articleID/3506/Default.aspx. 
  56. ↑ "Oaktree Capital sells final stake in Nine Entertainment". The Australian. July 13, 2017. http://www.theaustralian.com.au/business/dataroom/oaktree-capital-sells-final-stake-in-nine-entertainment/news-story/6367e330ccb01cb18b4fb152eff0c60c. 
  57. ↑ CONNELLY, LAYLAN (11 February 2016). "Quiksilver, free from bankruptcy, talks booze and boardshorts" (in en-US). http://www.ocregister.com/articles/company-703761-quiksilver-tanner.html. 
  58. ↑ Hausmann, Daniel (2010-04-23). "Carlyle's Flightplan: Betting On An Aviation Recovery". Private Equity Beat. Dow Jones. https://blogs.wsj.com/privateequity/2010/04/23/carlyles-flightplan-betting-on-an-aviation-recovery/. 
  59. ↑ "Communiqué de Oaktree et Pierre-Antoine Capton". 7 September 2020. https://www.smcaen.fr/2020-2021/actualites/infos-club/communique-de-oaktree-et-pierre-antoine-capton. 
  60. ↑ Marek, Lynne (23 July 2012). "Tribune's bankruptcy exit could mean company breakup". Crain's Chicago Business. http://www.chicagobusiness.com/article/20120721/ISSUE01/307219974/tribunes-bankruptcy-exit-could-mean-company-breakup. 
  61. ↑ Nouvelle, L'Usine (2010-04-22). "Investissement, mais coupe claire aux Verreries de l'Orne" (in fr). L'Usine Nouvelle (Antony, Hauts-de-Seine, France). http://www.usinenouvelle.com/article/investissement-mais-coupe-claire-aux-verreries-de-l-orne.N130319. Retrieved 2010-05-14. 
  62. ↑ Nic Fildes (27 September 2020). "Oaktree invests £100m in British broadband". Financial Times. https://www.ft.com/content/ba2f2477-70a5-4680-b087-7395cecbd2fe. 

Further reading

  • 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)

External links

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