Friday, 26 December 2014
Last updated 2 days ago
Mar 7 2011 | 9:26am ET
Oaktree Capital Management is liquidating the hedge fund it launched three years ago to take advantage of the financial crisis with distressed investments.
The Los Angeles-based firm began returning $3 billion from its $11 billion OCM Opportunities VIIb fund in January. Howard Marks, the firm's chairman, told Bloomberg News that there simply aren't the same kinds of opportunities available today for the fund, which has enjoyed annualized returns of 31%.
"People went in to the 2008 fund because we told them that was a great cyclical opportunity to make extremely high returns," he said. "But this kind of opportunity is not there in today's market, so I think we should return the money to investors and they can choose whether to come back into any of our new funds," such as the $1.6 billion U.S. mezzanine fund the firm raised in November.
Oaktree is returning capital from the Opportunities fund before the beginning of its liquidation period rather than reinvesting proceeds from asset sales.
Those investors who do choose to come back to Oaktree will likely be getting a steadier diet of European investments as opposed to U.S. investments, Marks said.
"The better opportunities lie in Europe, because banks have some purification job to do on their portfolios, and in mid-cap deals and also in debt related to commercial real estate," he explained. "We indicated to our investors in 2008 that a return before fees of more than 25% is possible. Today, you can't get that level of returns from traditional U.S. distressed debt."
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.