Marks warns don’t position for prosperity: AVCJ Forum
Howard Marks, Founding Partner at Oaktree Capital and one of the world’s foremost distressed investors, shared his views on global markets in his keynote speech opening the second day of the AVCJ Forum in Hong Kong, advising caution and noting that: “we are not positioning our portfolios for prosperity.”
Observing that both markets and general sentiment have improved since the depths of the GFC, Marks said that, “knives are not falling and bargains are not rife.” However, he added that, “in our business of managing money, there are two risks: the risk of missing opportunity, and the risk of losing money. Today I would want to avoid the error of losing money.”
Marks also pointed out that private equity-related distressed opportunities have stayed mostly in the West. “Use of leverage in the pre-Crisis years was really concentrated in the US and Europe. And that’s where the opportunity was and will be. Asia has not operated on leverage, so you’re not going to see it here.”
Finally, Marks addressed the question, much asked lately, of whether the “wall of maturities” due in 2012-13 is going to trigger a new golden opportunity for distress. “The answer is, nobody knows.”
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