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Oaktree poised to rebound in next credit cycle: Barron's

[December 01, 2014]  NEW YORK (Reuters) - Oaktree Capital Group LLC, the world's largest asset manager specializing in distressed debt, could rebound sharply in the next credit cycle, Barron's financial newspaper said in its Dec. 1 edition.

The company is well positioned to act when opportunities arise, particularly with plans to raise about $20 billion in new capital to supplement an existing $13 billion in "dry powder" - money pledged by investors to private equity firms but still yet to be invested.

The lack of attractive investment opportunities in distressed and high-yield debt has depressed its shares recently, the report said. However, the dip may benefit investors who believe that volatility will return to the credit markets. The company became public in April 2012, and its stock is up 10 percent since then, but down 30 percent from a March peak, the paper said. Oaktree's stock fell 39 cents on Friday to close at $46.31.

Also, the paper said that Oaktree's revenue could fall 30 percent this year to $1.4 billion, "driven by a steep drop in incentive income, mainly due to the failing off of distributions from a large distressed-debt fund raised during the recession." Revenue is expected to grow in 2015.

(Reporting by Catherine Ngai; Editing by Eric Walsh)

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