Marks's firm deployed $10 billion in fifteen weeks during the financial crisis after earlier caution.
“See, the lead up was that because we were worried in 'five and assets, we liquidated a lot of funds, if we raised funds, we raised only small funds, we increased our selectivity.”
Marks notes the global financial crisis had only one year of elevated high yield defaults versus the normal two years.
“the global financial crisis, which was probably the most destructive environment I've ever lived through, have only one year of elevated defaults on high yield bonds rather than the normal two.”
Marks says non-bank lenders could demand high rates and safety in 2011 when limited supply met strong private equity demand.
“And of course, since the demand for capital from the private equity industry was strong, and the supply of capital from the non bank lenders was limited, the non bank lenders could demand high interest rates and good safety.”