Howard Marks told Bloomberg News that going public was a humbling experience. The IPO of Oaktree Capital Group “was very challenging,” he says.
The Los Angeles-based distressed debt manager raised $380 million in April after selling 8.84 million shares at $43 each, the bottom of its price range. In its first day of trade, the offering opened 5% below its $43 IPO price and has never rebounded. Oaktree has come close but has yet to trade at its $43 offer price. On Monday, shares of company changed hands at $41.50 on volume of 62,983 on the NYSE.
The Carlyle Group was also humbled last week. The PE firm went public on the Nasdaq on May 3 after raising $671 million. Shares of the IPO have hovered very close to their $22 offer price (although BigCharts says the IPO traded at $21.85 on Thursday making it a broken deal). Shares of Carlyle on Monday were off 3 cents to $22.02 on volume of 1.47 million shares.
“We had to do a small deal at the bottom end of the range,” Marks says of the Oaktree IPO. “You have to accept that you’re not a master of the universe, and that these things are not within your control.”
Marks, who is Oaktree Capital Group’s chairman and principal, told Bloomberg he sold about 7% of the stock he owned in the IPO. “I believe that if we are successful in our business then the public market will take care of itself,” he says in the story.
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