Market
Memos From Howard Marks: What’s Going on in Private Credit?Private Funds
Diversifying portfolios beyond public markets
Image
The Basics
Private funds offer a limited number of investors (high-net-worth individuals and institutions) the opportunity to invest in assets that are not available via more traditional publicly traded funds, such as private companies, real assets or credit.
Private funds are not listed on public exchanges. While these funds give an investment manager greater flexibility in the types of investments that can be made in seeking higher returns, these vehicles can restrict access to capital for years. In addition, these funds are typically less regulated than public funds (although they are subject to certain key regulations) and have certain risks, such as a lack of transparency and regulatory oversight.
Private funds have high minimum investment requirements and deploy capital over a specified time frame, after which the fund often divests its assets through initial public offerings, mergers or private sales.
Features
Private funds have the following features and potential benefits:
Image
Diversification*
Access to scarce or lucrative opportunities that differ from traditional equities and bonds
Image
Attractive risk-adjusted returns
Long-term investments with attractive stated internal rates of return
Image
Lower volatility
Manage volatility by restricting redemptions and/or investing in private assets
*Diversification does not ensure a profit or protect against loss.
Explore Our Capabilities
Offering real asset and credit strategies where we believe Brookfield and Oaktree possess a competitive advantage.
Explore Our Capabilities
Offering real asset and credit strategies where we believe Brookfield and Oaktree possess a competitive advantage.
