Q: So I am reading an article in The Economist on business development companies ( BDC ) and private credit companies in general which states that “Oaktree allowed 8.5 % of one of its ( BDC ) funds to leave PAYING SOME OF THEM WITH CASH FROM BROOKFIELD ( my caps).
Now BN is always telling us how stable , thoughtful and careful they are with our money and Oaktree and Mr. Marks tells us how so risk adverse they are , but I am ( BN shareholder ) beginning to wonder.
Would you analyze the situation and tell us how much of a problem this could be for BN.
Thanks. Derek.
Now BN is always telling us how stable , thoughtful and careful they are with our money and Oaktree and Mr. Marks tells us how so risk adverse they are , but I am ( BN shareholder ) beginning to wonder.
Would you analyze the situation and tell us how much of a problem this could be for BN.
Thanks. Derek.
5i Research Answer:
BN is well diversified across their investments. Of the $12 bln in direct investments, Oaktree is $1.9 bln. Of the 24 strategies, five are focused on credit. SO, while it is stil a big part of the business, they do have other avenues for generating income. The private credit space continues to have issues and the sentiment here is weighing on BN but we view some of these risks as getting priced in at this stage and view BN as well diversified within this area.