Howard Marks•Co-Founder, Oaktree Capital Management
Executive Summary
8 quotes
Concerns Raised
Opaque and potentially misleading valuations in private credit that mask true volatility and risk.
The private equity industry's struggle to exit a ~$3 trillion backlog of portfolio companies in a high-rate environment.
The potential for "extend and pretend" behavior in private credit during a downturn, delaying the recognition of losses.
The end of the easy-money era (2009-2021) creating a fundamentally more challenging environment for asset owners.
Opportunities Identified
Applying a disciplined, risk-control-focused approach to credit investing can yield consistent returns, especially when others are chasing yield aggressively.
Future market dislocations and recessions will create opportunities for distressed debt investors who have been patient and prudent.