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Highlights
- Oaktree Capital identifies opportunities in China's transitioning economy.
- Co-chairman Howard Marks emphasizes a focus on undervalued assets globally.
- Contrasting asset valuations in the US and China drive strategic interest.
Oaktree Capital Management (NYSE:OAK), a prominent global asset manager, is actively exploring opportunities in China despite prevailing caution among international investors. Howard Marks, the co-chairman and co-founder of Oaktree Capital, shared insights into the firm’s approach during a recent Bloomberg Television interview. He emphasized the firm’s strategy of targeting undervalued assets that others might overlook.
Marks stated that comments labeling China as “uninvestable” resonate positively with his philosophy. Over the years, Oaktree Capital has built its reputation by focusing on acquiring assets that are perceived as challenging or undervalued by others, often unlocking value where few anticipate it.
Speaking at an event in Australia earlier this month, Marks acknowledged that China’s economy is undergoing a significant transition. Despite the challenges, he views this period as an avenue for uncovering investment possibilities. According to Marks, China still presents opportunities that align with Oaktree Capital’s expertise in identifying value in unconventional markets.
In contrast, Marks highlighted that while the US economy continues to perform well, asset valuations in the country appear relatively elevated. This creates a dichotomy where China, though facing economic hurdles, offers more attractive pricing for assets. He described this scenario as a reflection of market sentiment, where the global narrative often influences investor behavior and pricing dynamics.
The remarks come at a time when global investors remain cautious about China due to factors like geopolitical tensions, regulatory changes, and slower economic growth. However, Oaktree Capital’s approach showcases its willingness to navigate these complexities in pursuit of long-term gains.
As Oaktree Capital’s strategy unfolds, Marks’s comments reinforce the firm's commitment to its foundational principles of contrarian investing. By focusing on opportunities in markets with perceived risks, Oaktree aims to capitalize on pricing disparities and secure value-driven outcomes.
Oaktree Capital’s interest in China not only reflects its confidence in the market’s resilience but also its broader philosophy of seeking undervalued opportunities globally. This approach continues to distinguish the firm in the evolving landscape of international asset management.
