30 Years of Oaktree

Hello and welcome to a special Oak Tree podcast. In honor of Oak Tree's thirtieth anniversary this April, we're delighted to bring you an excerpt from a recent fireside chat with co founders Howard Marks, Bruce Karsh, and Sheldon Stone, moderated by Madeline Horton, global head of human resources. We hope you enjoy their conversation as we celebrate three decades of Oaktree.

Hi, everyone. Thank you so much for joining us today for a very special Fireside Chat with our cofounders, Howard, Bruce, and Sheldon. I'm honored to sit here today as we reminisce about the last thirty years. I'm not going to queue Bruce Springsteen glory days because we know the best is yet to come. But I do feel like this is a bit like the podcast acquired where we're gonna go deep into the history of our favorite firm. With that, we'll get started. Howard and Bruce, would you like to share the story of how you met?

Well, sure. I think that's a question for Bruce. But just to set the scene, as Bruce and I usually do when we make marketing calls together, we've been doing this for thirty years. As he puts it, I provide the Thirty seven years. Thirty seven years. I provide the play by play, and he provides the color. So that's what I'll do. And usually, I'll start off the answers and let the guys take over. But in this case, I think it's it's for Bruce. Yeah.

I should ask because I took the initiative to meet Howard. I had this idea of creating a distressed F Fund that I've seen and thought about when I was working for Eli Broad at Sun America. And Howard and Sheldon were the best people, I thought, in Los Angeles to pitch this idea to. So I called up Howard. He agreed to meet with me. We had lunch in Brentwood. I pitched the idea. He liked it. He had me meet Sheldon and he hired me. So I was fortunate, A, that he took my call, b, that he liked my idea, and c, that he hired me.

And I remember how enthusiastic Sheldon was once he heard about it. My reaction was if you've been in high yield bonds long enough, you had plenty of experience buying bonds at a hundred, seeing them fall to 10 in bankruptcy, and then working out the bankruptcy and getting 30 for them. So what I surmised from Sheldon's reaction is, well, why don't we form a fund to do this 10 to 30 part? And, obviously, it worked out great. The

other thing to know, by the way, is that at that time, Howard was a huge name in the investment management industry. That was, what, thirty eight years ago. Everyone knew him, knew that he and Sheldon were the leaders in high yield, so I felt very fortunate.

And, Sheldon, do you remember how you met Howard?

Yeah. 1983. I was working at Prudential in private lending. I got a call from a headhunter, said that there's an opportunity to go into the high yield bond market, and you've got to meet this fellow Howard Marks. We had breakfast in the city. I think early on, Howard, you shared your philosophy of the importance of a balanced life. You work hard, you work smart, but you also have time to enjoy what you do personally. So I made the move in '83. What I'd forgotten to ask is whether you were actually gonna be in New York. You were in Beverly Hills, and I was in New York. So much for due diligence

We all wanna know whose idea was it to start your own firm?