L.A. money manager Oaktree Capital may list shares on NYSE
Oaktree Capital Management, one of L.A.’s largest money management firms, is in discussions to list its shares on the New York Stock Exchange -- a move that would make stock in the long-secretive firm available to the general public.
Oaktree, which manages about $85 billion, is one of Wall Street’s best-known investors in “distressed” securities, meaning bonds of companies that find themselves in financial trouble.
The firm, headed by Howard Marks and Bruce Karsh, also is a big player in private equity and commercial real estate and owns a minority stake in DoubleLine Capital, the bond-fund start-up launched in 2009 by star manager Jeffrey Gundlach.
The NYSE stock listing would occur without a public offering of new shares, according to the Financial Times, which first reported on Oaktree’s discussions on Wednesday. Rather, Oaktree would transfer to the NYSE shares that now trade on a private stock exchange set up by brokerage Goldman, Sachs & Co. in 2007, the Times said.
Oaktree’s shares on the Goldman exchange have been available only to institutional investors. The stock was initially sold at $44 a share and is trading in the same general range now, valuing the company at about $6.2 billion as of March 31.
An NYSE listing would mean a much larger audience of investors and presumably could lead to a higher share price. It also would make it easier for Oaktree executives and employees to turn their own shares into cash.
Oaktree declined to comment on its plans. But there has been speculation about the company shifting to the public market after a rival money manager, Apollo Global Management, made the switch from the Goldman private exchange to the NYSE in March.
Apollo, however, sold new shares as part of its move. The company’s NYSE-listed shares were initially priced at $19. They closed at $17.85 on Wednesday.
Oaktree was founded in 1995 by Marks, Karsh, Richard Masson, Sheldon Stone, Stephen Kaplan and Larry Keele when they decided to bolt from L.A.-based Trust Co. of the West. They had been with TCW since the late 1980s, directing portfolios of junk bonds, distressed debt and other assets.
Oaktree, which has 615 employees in 13 offices worldwide, has built a reputation as a savvy player in troubled assets. Pension funds and other institutional clients know the firm as a skilled -- and very patient -- opportunistic investor. The company's portfolio has grown by about $38 billion just since October 2007.
Oaktree itself has kept a relatively low public profile, but Marks’ client letters chronicling the highs and lows of corporate finance and market swings are widely read on Wall Street.
Marks, 65, just published a book, “The Most Important Thing,” based on his client letters.
-- Tom Petruno
Top photo: Howard Marks. Bottom photo: Bruce Karsh. Credit: Oaktree Capital