Howard Marks, chairman of Oaktree Capital Group LLC, said the pace of his firm’s investing in Europe is accelerating as banks are more willing to sell troubled assets such as distressed real estate and nonperforming loans.
“The deluge never arrived but it’s happening more now,” Marks said today at Goldman Sachs Group Inc.’s financial services conference in New York. “The proportion of our investing which is taking place in Europe is substantially increasing.”
The comments were echoed by Apollo Global Management LLC co-founder Marc Rowan, who said U.S. investors have an opportunity to step into the lending void left by European banks hampered by stricter capital standards. Traditional lenders are constrained as they rebuild their capital bases to comply with stricter regulations such as the Basel III standards.
“The traditional banking system in Europe is going to shrink immensely,” Rowan said. “There will be an opportunity for us to establish lending franchises in Europe where we will not get rich but we will earn excess return as traditional lenders pull away.”
Oaktree, based in Los Angeles, is the world’s largest distressed-debt investor, managing total assets of $80 billion. New York-based Apollo oversees $113 billion in private-equity, credit and real estate assets.