Brookfield Asset Management’s chief executive wants Howard Marks, the veteran distressed debt guru and co-founder of Oaktree Capital Group, to continue his investment work, including his letters to clients, for years to come.
Brookfield announced that it will take a majority stake in Oaktree in March, with the surprise move sparking speculation that Brookfield’s chief executive Bruce Flatt could become an heir to Oaktree’s 73-year-old investing “legend”.
Known in investment circles for his “memos to Oaktree clients”, which he has been writing since the 1990s, Marks counts Warren Buffett as one of his most avid readers.
“We want Mr. Marks to keep doing what he does, we want him to keep writing his letters. He didn’t quite commit to 25 years but I told him 25 years would be helpful,” Flatt told Reuters in an interview during a visit to Tokyo.
Flatt said Toronto-based Brookfield, which agreed to buy a 62 percent stake in Los Angeles-headquartered Oaktree Capital for US$4.8 billion to create a rival to players like Blackstone Group, has no plans to buy other asset managers for now.
The Canadian investor also said he does not plan to increase Brookfield’s stake in Oaktree to 100 percent, although the deal allows it to do so after 2022.
“We weren’t interested in a 100 percent of the company because we wanted them to run the business and we wanted them to remain with the business to keep their stake. Our goal is to keep the Oaktree brand to continue those strategies within Oaktree and differentiate them in that way,” he said.
Brookfield is a leading global alternative asset management firm and has total assets of US$365 billion under management in more than 30 countries, with a focus on real estate, renewable power, infrastructure and private equity.
Asked if there would be more acquisitions in the coming year, Flatt said “we have no intentions of doing more. Our business is quite complete for what we want to do.” “But you never say never,” he added.
Flatt flagged close investment philosophies at Oaktree and BAM, which he said was growing fast in the Asia-Pacific region.
“Our Asian business is modest compared to the total scale of our build today but will grow significantly in the next 10 years. Longer term, I think 25 percent of our business will be in Asia. Currently its about 10 percent for the Asia-Pacific,” he said.
By Tomo Uetake and Hideyuki Sano
(Reporting by Tomo Uetake; Editing by Alexander Smith)
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