Armen Panossian (Co-CEO, Oaktree Capital): Navigating the 2026-27 Liquidity Gap. How the World’s Leading Distressed Debt Investor is Positioning for Market Shifts

Nov 6, 2024

Armen Panossian, Co-CEO of Oaktree Capital, shares his expertise in distressed debt investing, emphasizing the unique opportunities that arise during market downturns. He discusses the expected liquidity gap in 2026-27 and its implications for small businesses and larger corporations. The conversation delves into the transformation of consumer behavior post-pandemic, inflation dynamics, and the complexities of private credit markets. Panossian also highlights his extensive background in finance and the lessons learned from previous economic cycles.

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Intro

00:00 • 3min

Navigating Distressed Debt: A Career in Finance

03:12 • 19min

Consumer Behavior and Inflation in a Post-Pandemic World

21:58 • 2min

Economic Disparities and the Impending Liquidity Crisis

24:19 • 4min

Navigating Small Business Challenges and Private Credit Trends

28:24 • 26min

Understanding Synthetic Risk Transfers and Their Risks

54:34 • 3min

Navigating U.S. Debt and Economic Stability Amid Election Promises

57:13 • 4min

In this episode, Partner and Private Wealth Advisor Ryan Loehr speaks with Armen Panossian, the co-CEO of Oaktree Capital. Oaktree is one of the most renowned investment businesses in the world, most famous for its capability in distressed debt and heavily influenced by Howard Marks who co-founded the business nearly 30 years ago. Beyond distressed debt, Oaktree oversees more than $193B for investors, which include most of the largest US pension funds; many sovereign wealth funds; endowments, large institutions and family offices. The business invests across credit, private equity, real estate and listed equities.

Armen joined the firm in 2007, immediately before it navigated the Global Financial Crisis in 2008 very successfully; and prior to this, worked in distressed debt with Pequot Capital Management, at the time one of the largest hedge funds globally. He holds a B.A. degree in economics with honors and distinction from Stanford University; an M.S. degree in health services research from Stanford Medical School; a J.D. degree from Harvard Law School; and an M.B.A. from Harvard Business School. Mr. Panossian serves on the Advisory Board of the Stanford Institute for Economic Policy Research. He is a member of the State Bar of California.

We explore a broad range of topics, including the conditions and settings that can make distressed debt investing attractive; example transactions that it has been successful with; and the timing of Oaktree's $15B+ raise for its largest distressed debt fund. We explore the dramatic shift in monetary policy and credit conditions over recent years and its implications; and observe segments of corporate America that are under increasing pressure, especially small-business. We then turn our conversation to private credit, including increased competition in this segment, key risks, relative appeal vs. other asset classes: risks and opportunities that eventuate from illiquidity, structuring, speed and scale; and the anticipated 'funding gap' that companies may face over 2026 and 2027. I hope you enjoy this episode.

Disclaimer:
The information in this podcast series is for general financial educational purposes only, should not be considered financial advice and is only intended for wholesale clients. That means the information does not consider your objectives, financial situation or needs. You should consider if the information is appropriate for you and your needs. You should always consult your trusted licensed professional adviser before making any investment decision.