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Howard Marks still sees opportunity in China

By NexChange
Hedge Funds

While most of his hedge fund brethren rush for the exit at the mere mention of China, Oaktree Capital’s Howard Marks says there’s still a lot of good buys in the region. And not only that, he sees a “bright future” ahead of it as well.

Granted, Marks is known as a distressed asset wunderkind, so his view may differ than the Bill Ackman’s and the Ray Dalio’s of the world, but surprisingly, the SCMP reports that most of his positions in the region aren't in his bread and butter non-performing loans or bankrupt companies, rather, they're mostly in listed Chinese equities.
“We have found equities in China that have been worth holding…We strongly believe in the A-share market…We have a substantial position in Chinese equities today and we are very comfortable.”
He also said that there were a lot of good buys when the SHCOMP hit the 3,100 level, especially in contrast to its earlier high of 5,200 points. He didn’t share which stocks he was talking about though, which would’ve been great to hear given that the index is still below 3,200.

Anyway, despite all that A-share talk, the man behind the world’s largest distressed-asset fund still has an eye on the region’s various bad debts, and is hoping to ramp up his holdings of them if he can:
“Oaktree made its first investment in non-performing loans in May and would continue, he said.

‘NPL investment will be a good idea if banks are willing to sell them at reasonable prices, which we believe to provide good return,’ he said.”
With the market going the way it is, he just might have a lot of those pretty soon.
Photo: Ade Russell

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