Marks says Oaktree deployed ten billion dollars in fifteen weeks after Lehman collapsed, averaging 650 million per week.
“after the global financial crisis, some people thought it represented an existential threat, we swung into action and we were able to invest $650,000,000 a week on average for fifteen weeks between Lehman's September 15 bankruptcy and the end of the year, that's $10,000,000,000”
Marks explains Oaktree's logic for buying during the Lehman crisis: if the system melts down, nothing matters anyway.
“Either the financial system is going to melt down or it's not. If it melts down, it doesn't matter whether we bought or not, because it's, you know, it's game over for everything.”
Marks deployed $450 million weekly for fifteen weeks during financial crisis, $650 million weekly across all Oaktree funds.
“So as you say, we invested $450,000,000 a week for the next fifteen weeks in that fund, which was 7,000,000,000 and Oaktree overall invested an average of $650,000,000 a week for the next fifteen weeks.”
Marks explains his logic for investing during 2008 crisis despite apocalyptic fears.
“But if I don't invest it and the world doesn't melt down, then we didn't do our job. QED, you have to move forward.”
Marks reveals Oaktree raised ten billion dollars for distressed debt before Lehman collapsed, three times larger than any prior fund.
“When Lehman Brothers went bankrupt in mid September of o eight, we had raised the biggest distressed debt fund in history by a factor of about three.”
Marks deployed seven billion dollars in Q4 2008 at 450 million per week for fifteen weeks after Lehman's collapse.
“He ran the fund in question and he bravely invested an average of $450,000,000 a week for the next fifteen weeks. That's $7,000,000,000 in one quarter.”
Marks explains crisis investing requires pre-raised capital, nerve to deploy it, and clean portfolio to act.
“Nobody will give you money to invest during a crisis. We had pre raised it. And you have to have the nerve to spend it.”
Marks describes Oaktree's crisis investing logic: if world melts down, nothing matters; if not, they must invest.
“If the world melts down, it doesn't matter what we did today. But if it doesn't melt down and we didn't invest, then we didn't do our job.”