The Insight by Oaktree Capital

Howard Marks (Co-Chairman) and Armen Panossian (Head of Performing Credit) discuss the implications of a potential sea change in the investment environment, tail risks in today's markets, and the concept of a full return world. They also explore the risks of higher interest rates, opportunities for opportunistic investors, and share their biggest surprises in the economy and stock market.

In the latest Performing Credit Quarterly, Oaktree argues that investors analyzing today’s leveraged credit markets should focus less on average risk and more on tail risk, as this segment of the market is currently much more vulnerable than usual. Armen Panossian (Head of Performing Credit) and Danielle Poli (Assistant Portfolio Manager, Global Credit) explore the risks and opportunities for credit investors if this tail risk becomes a tail reality.You can read the 3Q2023 PCQ here (https://www.oaktreecapital.com/docs/default-source/default-document-library/performing-credit-quarterly-3q2023.pdf?sfvrsn=6bf05166_3).

Wayne Dahl, Robert O’Leary, and Mark Jacobs discuss credit investor strategies in a volatile interest rate environment, attractive sectors for opportunistic credit investors, misconceptions about the commercial real estate market, and the opportunity to buy high-quality assets at discounted prices.

Portfolio managers discuss the challenges of predicting interest rate moves and their impact on speculative grade credit. They also explore the effects of government spending on energy and infrastructure investments and the potential for attractive investments in Chinese equity markets. Plus, the importance of observing actions of governments and companies in emerging markets.

Learn about the changes in European credit, challenges of the post-easy money era, risks of geopolitics and AI, and the quality advantage in European markets. Explore the role of banks, syndicated loans, CLOs, high yield bonds, investment grade bonds, and private credit. Discuss the dilemma of buying opportunities, jurisdiction differences, mispriced risks, labor force shortage, risks of higher interest rates, and the impact of AI. Navigate uncertainty in the market and discover potential opportunities.

Armen Panossian (Head of Performing Credit), Danielle Poli (Assistant Portfolio Manager, Global Credit), and Megan Messina (Head of CLO Capital Markets) discuss topics from the 2Q2023 Performing Credit Quarterly.  They consider the current tug-of war between fiscal and monetary policy, opportunities in credit, and what many investors are getting wrong about today’s CLO market.

The U.S. economy continues to send mixed messages – but that may be because the Biden administration’s desire to keep the economy churning has clashed with the Federal Reserve’s interest in throwing sand in the gears. In Oaktree’s latest Performing Credit Quarterly, Armen Panossian (Head of Performing Credit) and Danielle Poli (Assistant Portfolio Manager, Global Credit) discuss the implications for investors, including why this tug-of-war may cause interest rates to remain higher for longer than many are anticipating.You can read the 2Q2023 PCQ here (https://www.oaktreecapital.com/docs/default-source/default-document-library/performing-credit-quarterly-2q2023.pdf?sfvrsn=f1ba5266_5).

David Rosenberg, co-portfolio manager of Oaktree’s U.S. and Global High Yield strategies, and Howard Marks discuss topics from the June 2023 edition of The Roundup. They consider the evolution of the high yield bond market, investor optimism and why this time might actually be different in financial markets.

Oaktree believes the investment environment may be undergoing a dramatic change, not simply a cyclical fluctuation. In the current installment of The Roundup, Oaktree portfolio managers explore the changes we’re already seeing in credit markets and consider what may lie ahead. What catalysts might widen the distressed liquid credit universe? How is the life sciences direct lending landscape evolving? How can real estate debt investors take advantage of the trends reshaping the market? Explore these and many other questions, and hear an excerpt from Howard Marks’s recent memo to clients.You can read The Roundup here (https://www.oaktreecapital.com/docs/default-source/default-document-library/the-roundup-june-2023-edition.pdf).

Oaktree Investment Risk Officer Wayne Dahl explains why economic statistics can tell conflicting stories and what this means for credit investors trying to make sense of today’s noisy data.