In 2019, Brookfield acquired a 62% stake in Oaktree Capital Management, one of the world’s premier credit investors. The deal brought together two firms that share a relentless focus on risk management while pursuing above-market returns. It also enabled us to establish a best-in-class credit business far more quickly than we could have done on our own, rounding out our offering of alternative investment products.
The Credit Story
Oaktree built its brand successfully launching funds during the three economic crises of 1990, 2001 and 2008. At the onset of 2020, Oaktree continued this trend by raising $16 billion of capital to put to work amid the post-pandemic market dislocation.
Working together, Brookfield and Oaktree continue to identify new opportunities. An increasing number of investors are looking for alternative asset managers that can provide diversified product offerings—and we’ve filled the gap by bringing Oaktree and insurance solutions into the fold.
Case Study: Oaktree
Over the years, many companies tried to buy Oaktree Capital Management, one the world’s premier credit investors, but its legendary founder, Howard Marks, wasn’t interested.
Then, in late 2018, we approached Marks and his co-founder, Bruce Karsh, and struck a deal to purchase 62% of Oaktree, which would continue operating independently.
Oaktree was best known for anticipating the global financial crisis of 2008. A year earlier, it had begun raising capital for a new fund, assembling one of the largest distressed funds in history at the time at $11 billion. It began buying bank notes at deep discounts, as well as the debt of struggling companies. When the government intervened with a stimulus program in early 2009, and markets recovered, so did Oaktree’s investments, eventually yielding billions for the firm.
Within a year of our partnership, global markets stalled with the uncertainty of the Coronavirus pandemic. At first, it appeared Covid-19 would create significant dislocation and a global recession. We raised more than $16 billion for a new fund, providing Oaktree with a significant amount of capital to deploy in dislocated markets.
“I don’t know if we would have gotten to $16 billion if we had done this on our own,” Marks said. “Brookfield introduced us to some of its clients, and with Brookfield behind us, it was just a great vote of confidence.”
