Oaktree Capital Management LP is looking for bargains in China even as other investors shy away from the world’s second-largest economy, according to co-chairman and co-founder Howard Marks.
“I’ve built my entire career on buying assets that other people consider uninvestable, and when you do that, you have an opportunity to get a bargain,” Marks said in a Bloomberg Television interview. ” He said comments about China being uninvestable were “music to my ears”.
Chinese officials are trying to measure the right amount of stimulus to accelerate growth in the economy without becoming overly dependent, Marks said. Marx said that growth rate of about 5% is still higher than the rest of the world, even if lower than in previous decades.
The words echoed his comments earlier this month about how China’s economy is in a period of transition. He said on Wednesday that while the US economy is performing well and better than many other countries, asset values in China are “a bit high” compared to bargain prices.
He said China still had “huge potential to come in” and that while investors had concerns about the current situation, it was a “bargain price”.
“Clearly China is on a pile of things that people feel sick about,” he added. “And it’s on that pile that you find the deals. That doesn’t mean you should buy everything on the pile, but that’s where you look for castoffs and bargains.
While U.S. stocks are “on the high side” relative to history, and that calls for a somewhat more defensive approach, Marks was not overly bearish on U.S. assets.
“I don’t think things are too much now and I don’t think it’s time to get out,” he said.
Marks co-founded Oaktree in 1995 with Bruce Karsch and five other partners at TCW Group Inc. The Los Angeles-based distressed debt investment firm had $205 billion in assets under management as of September. It invests in credit, private equity, real assets and listed equities.
