Oaktree Capital Management is an American global asset management company specializing in alternative investment strategies. It is the biggest distressed investor in the world, and one of the largest credit investors in the world. Oaktree emphasizes an opportunistic, value-oriented approach, and risks for investing in depressed debt, corporate debt (including high yield debt and senior loans), investment controls (including private equity and special situations), convertible securities, real estate and equity listed.
As of December 31, 2017, the company manages $ 100 billion for clients covering 75 of the 100 largest US pension plans, as well as public funds, foundations, companies and insurance companies, endowments, and state wealth funds. The company's co-chairman, Howard Marks, has been described as "one of the smartest investors in the world," and is known in the investment community for a letter to investors called "Oaktree memos".
The company was founded in 1995 by a group that previously worked together at the TCW Group beginning in the 1980s. Oaktree quickly established a reputation in the debt market with high yield and distress. On April 12, 2012, Oaktree Capital Group LLC is listed on the NYSE: Ã, OAK.
Video Oaktree Capital Management
Company overview
With headquarters in Los Angeles, the company has over 900 employees and offices in 18 cities around the world (Los Angeles, London, New York City, Hong Kong, Stamford, Connecticut; Tokyo; Luxembourg; Paris; Frankfurt; Beijing; Amsterdam; Dubai; Houston; Shanghai; and Sydney).
Investment philosophy
Oaktree has a value-oriented investment philosophy, emphasizing risk control, consistency and specialization, focusing on opportunities that offer safety margins. On November 12, 2011, the Financial Times said about the Oaktree approach: "The heart of Oaktree-style risk management, with an emphasis on life for another battle, is simple. Oaktree ignores overly complex hedging strategies "This company specializes in off-the-beaten-path and contrarian investments, and likes companies with real assets. The company motto is "if we avoid the losers, the winners will take care of themselves."
Investment focus
Oaktree invests throughout the capital structure, with an emphasis on senior debt in companies and markets where it has what it calls "knowledge gains." Distressed companies or companies that are sick, according to Oaktree, provide such opportunities.
Since its formation in 1995, Oaktree has become the biggest troubled debt investor in the world. In 2008, he raised $ 10.9 billion for what was the largest ever debt fund, the VIIb Funds Opportunity. As reported in the The Washington Post on June 26, 2011, Oaktree's 17 debt restricted funds (which do not use leverage) have an average annual profit of 19% after cost over the last 22 years.
In addition to investing credit in troubled debt and high yield bonds, Oaktree also invests in areas such as private equity, real estate, and registered equity. In recent years, the company has expanded its real estate activities.
Investor base
Oaktree customers include 75 of the 100 largest US pension plans, 38 states in the United States, over 400 companies and/or their pensions, more than 350 universities, charities and endowments and other foundations, 16 state funds. According to Wall Street Journal, Oaktree has been "long considered a stable storage for pensions and endowments."
Depressed fund-debt companies are often over-subscribed, and in 2010 Oaktree turned down potential investors because of self-imposed limits on the size of the funds. By law, clients are required to be called accredited investors, however, sub-advisory relationships with mutual funds such as The Vanguard Group and Russell Investment Group provide smaller investor access to Oaktree portfolio managers.
Maps Oaktree Capital Management
History
Beginning of the year (1995-1999)
Oaktree was founded in 1995 by a group of principals who first joined together at TCW Group in the mid-1980s to manage high yield bonds, convertible securities, distressed debt, real estate, and major investments. Within three months of its inception in 1995, "over 30 TCW clients transfer $ 1.5 billion in assets to Oaktree."
Oaktree has established various sub-advisory relationships since 1995. In 1996, Oaktree was elected as sub-adviser to the Vanguard Convertible Securities Fund.
Since 1995, Oaktree has created the so-called "stepping out" strategy, usually coinciding with the opening of new offices around the world. Its growth in strategy is largely focused on expanding into European and Asian markets. Between 1997 and 1999, Oaktree created three new strategies: the Absolute Return Emerging Markets in 1997, the European High Bonds in 1999 and the Opportunity in 1999. Oaktree is one of the first US-based alternative asset managers with an investment team Special Europe that focus on credit.
Expansion (2000-2010)
In 2001, Oaktree continued to introduce a new "step-out" strategy, starting with Mezzanine Finance. Asia Principal Opportunities (2006) is followed, together with Principal Investments Europe (2006), European Senior Loans (2006), US Senior Loans and Value Opportunities (2007), Global High Yield Bonds (2010), Emerging Markets Equities (2011), and Real Estate Debt (2012).
In 2005, the Securities and Exchange Commission ordered Oaktree to pay fines, interest and profit after the SEC decided that they had "sold short securities" before five legal days after the public offering price was announced. Oaktree is required to implement policies and procedures to prevent future violations.
In 2008, the company raised $ 11 billion for their depressed debt funds. In 2009, Oaktree was selected by the US Treasury, along with eight other managers (BlackRock, Invesco, AllianceBernstein, and others) to participate in the Government Public Private Investment Program (PPIP). At the time of Oaktree's inclusion in the PPIP program, The New York Times reported: "Howard S. Marks is a kind of financier that Washington hopes will help repair the crumbling state banks." On December 31, 2017, Oaktree PPIP Fund, L.P. has a gross return of 28%.
Recent years (2010-present)
- Expansion relationship
In recent years, the company has formed several strategic relationships. In 2009, Oaktree acquired a 20% stake in DoubleLine Capital, a Los Angeles-based investment firm specializing in fixed-income mortgage-backed portfolios.
His relationship with Vanguard expanded in 2011, when Oaktree was selected as one of four companies to manage Vanguard Emerging Markets Select Stock Fund. In 2010, Oaktree was selected as one of three advisors to Russell's Global Opportunistic Credit Fund and was selected as the manager for Credit Suisse (Lux) I Fund in 2011.
In 2017, Eaton Vance launches managed Oaktree Diversified NextShares fund which is traded on the exchange with Oaktree as subadvisor. Also, by 2017, Oaktree launches two BDCs: Oaktree Specialty Lending Corporation and Oaktree Strategic Income Corporation.
By 2018, Oaktree submits a registration statement to launch a non-traded REIT.
- Europe's sovereign debt crisis
Looking for investment opportunities created by the European sovereign debt crisis, Oaktree started the European Premier Fund III in November 2011 with a capital commitment of around EUR3 billion.
- More recent funds
According to the company's published financial results, Oaktree raised $ 11 billion for Oaktree Opportunities Funds X and Xb ("Opps X and Xb"). As with other Opportunity funds, Funds X and Xb will focus on "market price inefficiencies resulting from corporate reorganization and restructuring, and senior and secure debt from operational companies both in the United States and Western Europe." New strategies, such as Global High Yield Bonds, Strategic Credit, European Private Debt, Emerging Markets, Total Return, Emerging Market Opportunities, Real Estate Debt, Value Equities, and Real Estate Value-Add are also added to the platform.
- NYSE listing
On April 12, 2012, Oaktree became a public partnership with NYSE listed shares. The company was previously listed on GSTrUE, a private over-the-counter exchange run by Goldman Sachs which officially ceased operations in 2012 after Oaktree, together with Apollo Global Management (in 2011), was registered and transferred to the NYSE.
Investment funds
Oaktree's current investment activities are divided into six major asset classes: depressed debt, corporate debt (including high yield debt and senior loans), control investments, convertible securities, real estate, and registered equity. The structure of the funds in each asset class varies, and is organized into "closed", open, or whatever type of funds.
Oaktree fund bids are organized into three broad categories based on periods of liquidity and lock-ups:
- Closed Funds : Closed funds are structured as limited partnerships that have a period of 10 or 11 years and have a specified period in which clients can subscribe to a limited partnership of interest in the fund. Closed funds have an investment period of three, four, or five years.
- Open-End Funds : Open-end funds are mixed as structured as a limited partnership that recognizes clients as new, sustainable partners in a sustainable way. Unlike close-end funds, these funds have no investment period. Capital can commit to new investments at any time during the life of the funds.
- Evergreen Fund : "Endowment" invests in long-term and short-term securities. Like open-end funds, Oaktree's green funds receive new capital on an ongoing basis. Clients in green funds are generally subject to a lock-up period between one and three years.
The following table lists the company's strategy and funds from the start (including TCW funds directed by the Oaktree manager before they left TCW to find Oaktree in 1995):
Closed Fund
Open-End Funds
Evergreen Funds
Assets
Current as of December 31, 2017:
Current investment
- General Maritime - Oil tankers utilizing foreign vessels and crew based in New York
- Sky Holding - jet proprietary
- Fitness First - Global health club network. Taken in partnership with Marathon Asset Management in 2012. Parts of the business are then sold in whole or in part in 2016-17.
- Verreries de l'Orne ÃÆ' EcouchÃÆ' Â © (Orne) - glass etching company - April 1, 2010
- CampofrÃÆ'o Food Group - (24%) European food industry
- Conbipel - (100%) Italian fashion industry
- Vivarte; French fashion industry
- Quiksilver - American retail sports company
- AdvancePierre Foods (merger completed September 30, 2010, from Pierre Foods, Advance Foods, and Advance Brands) - a food manufacturing company with facilities in Iowa, Oklahoma, Ohio, North Carolina, Maine, & amp; South Carolina.
- STORE Capital
- Billabong International Ltd. - the largest surfwear company in Australia.
- Aleris International - acquired May 1, 2010
- Almatis Group - acquired 2010
- Triton Media Group - media group managed by Oaktree Capital
- Townsquare Media - broadcast station and local media company owned by Oaktree Capital - acquired April 1, 2010
- Cumulus Media - An October 20, 2011, SEC filing by Oaktree Capital indicates that it has purchased 3,985,983 shares of Media Cumulus shares, giving Oaktree Capital a position currently worth $ 11,320,192 in radio operators.
- The Tribune Company - acquired together with JPMorgan Chase and Angelo, Gordon & amp; Together.; the acquisition is completed in July 2012.
- Nine Entertainment Co. - taken over (with Apollo Global Management and Goldman Sachs) from CVC Asia Pacific in a refinancing agreement in October 2012, selling the final shares in 2017.
- MediaWorks New Zealand - acquired 77.8% of the controlling stake in the business, having recently bought shares from RBS and Westpac; the acquisition was completed April 29, 2015.
- AdvancePierre Foods (merger completed September 30, 2010, from Pierre Foods, Advance Foods, and Advance Brands) - a food manufacturing company with facilities in Iowa, Oklahoma, Ohio, North Carolina, Maine, & amp; South Carolina.
See also
- Category: Oaktree Capital Management
References
Further reading
- 2011: The Most Important: Same Same for a Thoughtful Investor by Howard Marks (Columbia University Press, ISBN 978-0231153683)
External links
- Official website
- 2014 financial year accounting report
Source of the article : Wikipedia
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