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Howard Marks' Oaktree Capital To Raise $250 Million In Debt, Firm Has $67 Billion In AUM Currently

Tyler Durden's picture





 

Despite his recent admonitions about market participants never learning from the past, Howard Marks is more than happy to take advantage of just the kind of gullibility he writes about in his expansive investor letters. In fact, the manager of over $67 billion in assets is launching a $250 million 10 year bond deal which Bloomberg expects will price as soon as today. The bonds are rated A- by S&P which had this to say:

"Oaktree has a long track record of successful investing
and was a strong net asset gatherer in 2007 and 2008, when many
funds experienced substantial outflows. Oaktree tends to outperform in difficult economic
environments but does not show the same spectacular returns
compared with other industry participants when investment
climates are more favorable.” 

We doubt Mr. Marks will lose too much sleep over his underperformance in good times, as according the investor presentation (see below) accompanying the bond offering, the firm generated a record $607 million in management fees in the LTM period alone. When one considers that the firm had a mere $88 million in management fees in 1999, and one can see why slow and steady is usually a much better recourse for fund managers than the quick and brutal "get rich or die trying" flameout that the Fed is trying to force all market participants into right now.

Some other observations from the roadshow presentation:

  • The firm has $26.8 billion in marketable securities, mostly debt, $36.9 billion in private partnerships, and $3.7 billion in evergreen funds.
  • Investors include 64 of largest 100 U.S. Pension funds (good pick here Calpers), and 300 colleges, universities and foundations
  • The top 25 clients participate in 4 different strategies on average
  • Overseas clients are the source of over 28% of AUM
  • In 2007-2008 the firm raised $30 billion in anticipation of distress opportunities

 

Oaktree Presentation -

 


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Wed, 11/18/2009 - 17:20 | Link to Comment Green Sharts
Green Sharts's picture

I see no mention in the presentation of what Oaktree plans to do with the proceeds of the offering.  One would be hard pressed to find another business that generated higher returns while requiring a relatively minor level of capital investment.

Wed, 11/18/2009 - 18:59 | Link to Comment Anonymous
Fri, 11/20/2009 - 09:03 | Link to Comment Anonymous
Wed, 11/18/2009 - 17:44 | Link to Comment JOHNICON
JOHNICON's picture

"General corporate purposes including general partner investments in Oaktree funds."

Wed, 11/18/2009 - 17:51 | Link to Comment curbyourrisk
curbyourrisk's picture

Bonuses

Wed, 11/18/2009 - 17:54 | Link to Comment anynonmous
anynonmous's picture

Oaktree's 13Fs for the quarter ending June 30 compared to September 30 tell an interesting story

June 30 Form 13F Information Table Value Total: 5,258,281
http://www.secinfo.com/dsv8a.s1q.htm

Sept 30 Form 13F Information Table Value Total: 4,382,976
http://www.secinfo.com/dsv8a.s1m.htm

Wed, 11/18/2009 - 17:56 | Link to Comment Assetman
Assetman's picture

Whatever the hell they want.

Wed, 11/18/2009 - 18:10 | Link to Comment Anonymous
Wed, 11/18/2009 - 18:21 | Link to Comment Careless Whisper
Careless Whisper's picture

Oak Tree is still in business?  alrighty then.

Tue, 12/22/2009 - 01:12 | Link to Comment Anonymous
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