The Canadian pension fund plans to increase its allocation to the region from 10% to 15% over the coming four years, even as its total assets under management rise.
Oaktree originally came to Asia during the troubled year of 1998 during the Asian financial crisis, and built out at a measured pace with offices in Singapore and Tokyo. Currently, in Tokyo, it operates real-estate, distressed-debt and hedge-fund strategies, and in Singapore solely hedge-fund investing. These activities are run as separate Asian books, whereas OaktreeÆs other speciality, private-equity investing in Asia, is sourced as an allocation from its global fund.
Given Ralph ParksÆ background as an M&A illuminati, his appointment is poised to herald OaktreeÆs advance into private-equity deals in the region. Initially, that will remain as an adjunct to the global fund, but in the medium term if the strategy proves successful, the firm may create a separate Asia-oriented fund.
ôBy the end of the first quarter 2007, Oaktree anticipates having over $1.5 billion available for private-equity investments in Asia,ö Parks told AsianInvestor.
Oaktree aims to concentrate on Greater China and Japan, with an opportunistic approach to Southeast Asia. It is also on the lookout for substantial local partners with whom it can ally to undertake real-estate investments.
Will Oaktree be investing in mainland private equity late in a cycle? Parks doesnÆt think so. His analysis of the private-equity market is that it is intrinsically non-cyclical in terms of origination and exits, but that valuations do react to macro-economics. He assesses China as still being laden with value opportunities, and that with that economy showing sustainable growth, top-quartile returns for private equity are still there for a selective investor.
ParksÆ departure from JPMorgan in November was somewhat controversial. He had assumed both chairman and CEO roles for the Asia-Pacific business in 2001. In July 2006 he gave up the CEO role but said he would continue to work as chairman to develop strategic opportunities for the firm, including work on potential joint ventures. But he stepped down a few months later. Gaby Abdelnour now serves as JPMorganÆs regional CEO.
Parks has 30 years of investment banking experience. Before moving to JPMorgan in 2000 (he moved to Asia the following year), he had been a partner at Goldman Sachs. He has also run private-equity deals for New York-based Beacon Group.
Oaktree manages over $33 billion globally. The company was founded in 1995 and is based in Los Angeles. It is especially busy at present in Europe where it is one of the largest shareholders in Eurotunnel, where it is taking an activist approach to the attempts by France to wrest the channel tunnel (unfairly, Oaktree claims) from Britain.
They have teamed up with each other and with overseas investors to boost investment capacity in real estate and infrastructure investments in Europe and North America.
Asset owners across Asia Pacific weathered some difficult market conditions in 2020. While most emerged from the year successfully, some notable exceptions suffered asset drops.
Thanks to the current rise in yields, the key return driver of the bond market is set to change but its bull run will very likely continue.
Asian institutional investors were generally more optimistic about post-pandemic economic recovery but only 33% were confident about achieving their short-term objectives.