Distressed Opportunities Better in Europe Than U.S., Marks Says

  • ‘We are participating’ despite risks, says Oaktree co-chairman
  • Best years ahead for emerging markets, according to manager

Distressed-debt opportunities are relatively plentiful in Europe but almost nonexistent in the U.S., said Howard Marks, co-chairman of Oaktree Capital Group LLC.

“If you’re waiting for distressed in the U.S., well, there isn’t much,” Marks said at a CFA Society Toronto event Wednesday in Canada. Oaktree, based in Los Angeles, managed $98.1 billion in distressed debt, private equity and other assets as of June 30. “It’s pretty good in Europe. There are risks in Europe, but we are participating.”

He cited Brexit, or Britain’s exit from the European Union, among the risks he’s watching, along with events in Italy and economic growth.

Marks, 70, has been cautioning investors to temper their expectations. At the Bloomberg Markets Most Influential Summit in New York in September, he said institutional investors face a “big problem” -- annualized returns below historical gains and in some cases less than what they need to meet their liabilities.

Marks also said at Wednesday’s event that the best years lie ahead for emerging markets, but added that investors should have patience and a long-term horizon to ride out big swings. He said few investors are accurate with macro calls, citing billionaire George Soros among the exceptions.

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