Howard Marks (investor)

• 1. Queens And The Wharton Years

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  Howard Stanley Marks was born in 1946 and raised in Queens, New York. His family was ethnically Jewish, yet he grew up as a Christian Scientist. This background shaped his early worldview before he entered the financial world. He attended the Wharton School of the University of Pennsylvania for his undergraduate studies. There he joined the Pi Kappa Alpha fraternity while studying finance. He graduated cum laude in 1967 with a minor in Japanese Studies. At age 23, he earned a Master of Business Administration from the University of Chicago Booth School of Business. He won the George Hay Brown Prize during that program. In 1975, he became a CFA charterholder.

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• 2. Citicorp And High Yield Debt

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  From 1969 until 1978, Marks worked at Citicorp as an equity research analyst. He later rose to become the company's Director of Research. From 1978 to 1985, he served as a vice president and senior portfolio manager. He oversaw convertible and high-yield debt during those years. Citibank allowed him to move to Los Angeles in 1980 to manage a high-yield fund. He had met Michael Milken in 1979 at Century City. Marks thought Milken's operation would make a good case study for Harvard Business School. This period established his expertise in complex debt instruments before he moved on to other roles.

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• 3. Founding Oaktree Capital Management

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  In 1985, Marks joined TCW Group where he led investment groups focused on high-yield debt. In 1988, he and Bruce Karsh organized one of the first distressed debt funds from a major financial institution. In 1995, he, Karsh, and three others decided to leave to start their own firm. They petitioned TCW to let them continue managing the funds they managed at TCW. The firm offered TCW a portion of the management fees. When TCW refused, the five partners left the company. They founded Oaktree Capital Management in Los Angeles that same year. After being founded in 1995, Oaktree grew rapidly. It began focusing on high-yield debt, distressed debt, and private equity.

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• 4. Risk And Market Cycles

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  Marks focuses on risk management as a core strategy for investors. He says investors should set investment strategy according to their personal situations. He asks whether they worry more about losing money or missing an opportunity. Marks believes it is hard to gain an advantage through research since so many smart people do it already. He suggests better inference of consequences implied by current company data instead. Managing the psychology of investing remains another key way to get an edge. Assessing the present stage of the business cycle matters greatly to his approach. He hopes to have average returns during a bull market while minimizing losses during bear markets. Losses do more harm than any benefit investors obtain from gains. He aims for a high batting average over home runs.

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• 5. The 2008 Financial Crisis

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  During the 2008 financial crisis, Oaktree raised $10.9 billion. This became the largest distressed debt fund in history. The firm used this capital to buy distressed assets. The move paid off richly for his investors. Funds led by Marks have produced long term returns net of fees of 19% per year. Investors are primarily pension funds and sovereign wealth funds. Marks notes that it is important for investors to admit what they don't know. He does favor using market timing strategies to have cash available to be invested during a downturn. This strategy allowed him to capitalize on the chaos when others fled.

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• 6. Public Listing And Brookfield Deal

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  In April 2012, Oaktree became a public company via an initial public offering. It listed on the New York Stock Exchange. The firm raised $380 million by selling 8.84 million shares for $43 each. In March 2019, Brookfield Asset Management acquired 62% of Oaktree. Marks and other members of Oaktree own 38% of the company. They retain full control of Oaktree's day-to-day operations despite the majority stake sale. This transition marked a significant shift in corporate ownership while preserving operational independence for the founding team.

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• 7. Philanthropy And Real Estate Portfolio

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  In 1992, Marks created the Howard S. Marks Terms Scholarship. It provides renewable scholarships to undergraduates at the University of Pennsylvania. In 2009 he endowed the Marks Family Writing Center at the university. In March 2023, Nancy and Howard Marks made a $5 million gift to UCLA. The donation endows a faculty chair held by the Vice Chair of Women's Health Research. Marks owns the firm that owns the $23.8 million house in the Kukio neighborhood of Hawaii. He bought an oceanfront property in East Hampton for $30 million in 2010. In May 2012, he purchased a duplex unit at 740 Park Avenue for $52.5 million. In 2013, Marks sold his mansion in Malibu, California for $75 million.

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