The Insight by Oaktree Capital Undercurrents
33 snips
Oct 9, 2025 In this discussion, Steve Tesoriere, Co-Portfolio Manager, shares insights on the bifurcation in equity markets, emphasizing AI's dual role in growth and investment risks. Olivia Guthorn, Managing Director, delves into healthcare's evolving landscape, highlighting the impact of private equity and recent policy changes. Justin Guichard, Co-Portfolio Manager, discusses the resurgence in commercial real estate, focusing on investor demand for new CMBS supply and contrasting the performance of office and residential sectors.
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AI Spend Is Propping Up Growth
- AI spending is driving a disproportionate share of recent GDP growth, notably in data centers and GPUs.
- When AI investment slows, broader economic growth could weaken because consumer demand is tepid.
Credit Markets Are Highly Selective
- Credit markets are bifurcated: high-quality IG and BB spreads are near all-time tights while CCC and loan spreads remain wide.
- The market is selectively pricing certainty and shunning credits with restructuring risk.
Pick Individual Credits With Strong Collateral
- Avoid indiscriminately buying CCC paper unless you can underwrite restructuring risk and documentation nuance.
- Seek mispriced single names where strong assets and documentation create asymmetric returns.