Brookfield is initially buying 62% of the alternative asset manager and could own the full company by 2029.
One of the world's biggest investment firms, Brookfield Asset Management, announced a record deal to buy a majority stake in, and eventually take over, Howard Marks' Oaktree Capital Group."It would be a much more formidable competitor" to Blackstone, one analyst said.On Tuesday, Toronto-based Brookfield Asset Management said it would buy a 62% stake in Los Angeles-based Oaktree Capital Group, the alternatives manager founded by Howard Marks.
"It's one of those deals that doesn't come along that often," Patrick Davitt, a research analyst at Autonomous Research, told Business Insider."It would be a much more formidable entity with a much better developed credit arm and start to look a lot more like Blackstone. From the standpoint of becoming a one-stop shop for limited partners, they're probably going to be close to the second-best gig in town next to Blackstone.
"It makes sense for two niche firms like that to expand on their operations, to combine their businesses to have stronger footing in the alternative asset management business," Tayfun Icten, a Morningstar analyst, said in an interview."Your assets get into an elevator and go home every night - the people," Icten said."Cultural fit is crucial in situations like this. It'll never be perfect. It can work but it's a painful process to mesh two teams together.
"Brookfield has a lot more capital to help Oaktree grow to the extent it wants to, which is something it didn't have before," he said.
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