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Oaktree files more IPO paperwork

The initial public offering could total more than $100 million, but analysts think Oaktree might delay its IPO until next year because of market conditions.

November 22, 2011|By Walter Hamilton, Los Angeles Times

Oaktree Capital Management took another step forward in its planned initial public offering, but analysts believe volatile economic conditions could stall its market debut until next year.

The Los Angeles investment giant filed more paperwork Monday with the Securities and Exchange Commission as it moves toward an IPO that could total more than $100 million. It is one of the world's largest money managers, with $73 billion of assets under management.

The regulatory filings did not specify when Oaktree might pursue a public listing. The company is moving slowly because the outlook for financial sector has been weak lately amid concerns about the European debt crisis and troubled U.S. economy, analysts said.

"The environment for financials has been tough, and the growth prospects for many of these companies are fairly limited," said Josef Schuster, founder of IPO research firm IPOX Schuster in Chicago. "You just don't have excitement about the industry."

That was evident last week when Oaktree rival Och-Ziff Capital Management Group's shares tumbled when it tried to sell $250 million worth of new stock in the market.

Oaktree has yet to release important details of its offering, including the exact amount it hopes to raise and the price at which it would sell shares, said Francis Gaskins, editor of IPOdesktop.com in Marina del Rey. The company also has not scheduled a road show at which it would give a detailed presentation about itself to prospective investors, he said.

"They're waiting for the right market conditions," Gaskins said. "Oaktree wants to be on deck, but now is not a good time."

Oaktree specializes in so-called distressed debt, buying up the bonds of companies in financial trouble. Along with other distressed-debt firms, Oaktree owns bonds issued by Tribune Co., owner of the Los Angeles Times, and is expected to take an equity stake in the media company when it emerges from bankruptcy protection.

Led by Howard Marks and Bruce Karsh, Oaktree also is a big player in private equity and commercial real estate. The firm owns a minority stake in DoubleLine Capital, the bond fund start-up launched in 2009 by prominent money manager Jeffrey Gundlach.

The company disclosed in Monday's regulatory filing that it had a net loss of $67 million during the first nine months of the year, compared with a net loss of $47.8 million a year earlier. Oaktree reported adjusted net income — which strips out items such as certain compensation expenses and income taxes — of $351.7 million during the same time period, down from $512 million in 2010.

Marks could not be reached for comment.

In 2007, Oaktree took a step toward going public by allowing its shares to be traded on a private exchange set up by Goldman Sachs.

Oaktree initially filed IPO paperwork in June. It plans to list on the New York Stock Exchange under the ticker symbol "OAK."

The company would follow several other alternative-asset managers that have gone public in recent years, including Blackstone Group, Apollo Global Management, Fortress Investment Group and Kohlberg Kravis & Roberts.

Several of those firms have been weak performers, giving investors pause about alternative-asset sector.

Blackstone, for example, went public in 2007 at $31 a share. It closed Monday at $13. Apollo went public in March at $19 but closed Monday at $11.72.

walter.hamilton@latimes.com

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