Oaktree files for $100m IPO

Oaktree will join peers such as Blackstone, KKR and Apollo with a public listing it said would allow it to transition beyond its founders, Howard Marks (pictured) and Bruce Karsh.

Oaktree Capital Management has filed plans for a $100 million flotation on the New York Stock Exchange. The listing will value the private equity firm at between $8 billion and $9 billion, according to press reports, although the firm’s filing with the US’ Securities and Exchange Commission did not specify a pricing range. Oaktree has approximately $80 billion of assets under management across various business lines.

Oaktree's move to go public follows in the wake of listings by peers such as the Blackstone Group, KKR and Apollo Management. Another peer, US firm the Carlyle Group, is understood to have mandated JP Morgan, Citigroup and Credit Suisse as bookrunners for its own listing later this year according to press reports. Carlyle declined to comment.

At some point Oaktree must be independent of its founders.

Oaktree IPO prospectus


Oaktree set out the strategy behind the IPO, explaining that it would allow its founders – Howard Marks and Bruce Karsh – to realise their stakes in the business in due course.

“We believe that at some point Oaktree must be independent of its founders. To accomplish this, generational transfer of ownership is necessary. Public ownership is the most widely accepted way to go beyond an entrepreneur-led or family-owned company to one able to live on indefinitely.

Bruce Karsh


“We want to continue the transfer of ownership in the firm to key employees, but we also want a mechanism that will enable the founders to realise value from their remaining stakes over time. Thus we have decided to continue issuing equity to employees and also to sell part to the public,” it said in the prospectus.

Oaktree said that post-IPO, it intended to preserve the current management structure.

The firm already has shares listed on a quasi-public platform set up by Goldman Sachs in 2007. Goldman, together with Morgan Stanley, will act as lead bookrunner for the IPO.

Oaktree has more than doubled its assets under management to $80 billion over the last five years, and has more than 600 employees in 13 offices worldwide, according to its IPO prospectus.

It said: “Since March 2006, we have raised more than $60 billion in assets, including over $10 billion in each of the last four calendar years, despite a difficult fundraising environment. Our closed-end funds have produced an aggregate gross internal rate of return of 20.4 percent on over $50 billion of drawn capital.

“Our primary goal is not simply to achieve superior investment performance, but to do so with less-than-commensurate risk. We believe that the best records are built on a “high batting average,” rather than a mix of brilliant successes and dismal failures,” it added.

Amongst the risk factors listed in the prospectus, Oaktree warned that, “Given our focus on achieving superior investment performance with less-than-commensurate risk, and the priority we afford our clients’ interests, we may reduce our AUM, restrain its growth, reduce our fees or otherwise alter the terms under which we do business when we deem it appropriate – even in circumstances where others might deem such actions unnecessary”.