The time is right to snap up “bargains”, according to Oaktree Capital founder Howard Marks.
The experienced debt investor has said he has started to “behave aggressively”, as debt prices drop.
“Everything we deal in is significantly cheaper than it was six or 12 months ago,” he added, highlighting drops in the prices of high-yield bonds, leveraged loans, mortgage-backed securities and collateralised loan obligations.
Marks said Los Angeles-based Oaktree did not make investment decisions based on macro forecasts – such as how high inflation would rise or whether there would be a recession – nor try to time the market.
“I think the idea of waiting for the bottom is a terrible idea,” he said. Assets could get cheaper than current valuations, “in which case we’ll buy more”.
Oaktree’s most high-profile recent deals have been in China, where it seized two crown jewel real estate projects from property developer Evergrande after it defaulted on $1bn of loans from Oaktree. Marks said Oaktree had not yet sold the two sites – Project Castle in Hong Kong and Venice on the mainland – but that “the process is going as it should”, adding: “We are in control of the assets, and we are very optimistic.”
