The Memo by Howard Marks
30 Years of Oaktree
May 6, 2025
Bruce Karsh, Co-Chairman and Chief Investment Officer at Oaktree Capital Management, shares insights from his three-decade journey co-founding the firm alongside Howard Marks and Sheldon Stone. They recount the heartwarming origins of Oaktree, including the humorous dinner conversation that sparked its creation. The trio reflects on foundational values, the significance of relationships in investment, and their first year's surprising financial success. They also celebrate the comforting stability of Oaktree while expressing gratitude for their colleagues as they approach the firm's 30th anniversary.
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Quick takeaways
- Oaktree Capital Management was founded on a distressed debt fund idea, emphasizing its humble beginnings with a typographical error in its name.
- The firm's enduring success is attributed to its shared values, strong culture, and a commitment to ethical practices amidst changing market conditions.
Deep dives
The Founding Story of Oaktree
The inception of Oaktree Capital Management was sparked by an idea for a distressed debt fund, pitched by Bruce Karsh to Howard Marks and Sheldon Stone during a lunch meeting. Bruce initiated this meeting after having worked in the finance industry, where he recognized the expertise of Howard and Sheldon in high-yield investments. Their enthusiasm led to discussions about starting their own firm, which initially included plans for a Montecito location. Ultimately, the firm was named 'Oaktree,' despite the name representing a typographical error, and they launched with $10 million in capital, quickly becoming cash flow positive within their first year.
