🎥 Live from New York with Oaktree's Armen Panossian - "don't reach for risk to deliver the right return"

Welcome back to the Alt Goes Mainstream podcast.

Today’s episode was filmed live at an event during a Brookfield Oaktree Wealth Solutions RIA Council meeting in New York.

Armen Panossian, the Co-CEO and Head of Performing Credit at Oaktree, and I sat down for a conversation in a Brookfield-owned building with a group of RIAs in the audience.

Armen, who joined Oaktree in 2007, has been an integral part of scaling Oaktree to over $209B in AUM. Oaktree, a storied firm, particularly in distressed credit, was recently fully acquired by Brookfield, the $1T AUM alternative asset manager.

Armen has a wealth of experience across different areas of credit. He is the Head of Performing Credit, where his responsibilities include oversight of the firm’s liquid and private credit strategies and as a portfolio manager within the Global Private Debt and Global Credit strategies. He also led the development of Oaktree’s CLO business.

Armen and I had a fascinating and thought-provoking conversation. We covered:

* The evolution of Oaktree’s business.

* How the acquisition by Brookfield has helped scale Oaktree’s business.

* Why private credit is more than direct lending.

* The nuances of asset-based finance.

* The current state of the credit markets.

* How Oaktree has approached distressed credit investing.

* What Armen’s memo would be if he were to write a memo like his colleague Howard Marks.

* And, why his memo might be titled “this is not your grandma’s private credit” or “don’t reach for risk to deliver the right return.”

Thanks Armen and the Brookfield Oaktree Wealth Solutions team for a fantastic night and Armen for sharing your wisdom and expertise with us.

Thanks for reading Alt Goes Mainstream! Subscribe for free to receive new posts and support my work - writing and podcasting about the convergence of private markets and private wealth since December 2020.

A word from AGM podcast sponsor, Ultimus Fund Solutions

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Show Notes

00:00 Message from our Sponsor, Ultimus

01:20 Welcome to the Alt Goes Mainstream Podcast

02:01 Live Event at Brookfield Oaktree Wealth Solutions RIA Council Meeting

02:08 Guest Introduction: Armen Panossian

04:07 Armen’s Background and Career Path

04:31 Early Career and Education

08:32 Joining Oaktree

09:03 Oaktree’s Early Days and Growth

09:28 Oaktree’s Investment Philosophy and Culture

12:57 Balancing the Pessimism of a Credit Investor and Business Building

13:25 Business Building and Strategy

15:50 Private Credit Market Insights

16:09 Scale and Strategy in Private Credit

16:48 Core and Alpha in Private Credit

17:26 Oaktree’s Approach to Direct Lending

21:25 Public vs. Private Credit Markets

23:09 Technicals and Fundamentals in Credit Markets

25:58 Valuation and Risk Management

26:51 Public Markets as Indicators

27:03 Consumer Impact on Private Credit

27:27 Market Psychology and Risk

29:04 Opportunities in Life Sciences Investing

29:48 Private Market Solutions for Struggling Industries

29:58 Judging Business Winners and Investment Opportunities

30:03 Public Sentiment and Private Investment

30:18 Private Credit Headlines and Challenges

30:35 Perceived vs. Actual Risks in Private Credit

30:59 Credit Market Technicals: Private vs. Public

31:41 Fraud Vigilance in Credit Markets

32:08 Oaktree’s Approach to Opportunistic Credit

34:05 Rescue Lending and Market Opportunities

34:38 Sector-Specific Lending: Life Sciences and Asset-Backed Finance

35:27 Asset-Backed Finance Market Dynamics

36:02 Oaktree’s History in Asset-Backed Finance

37:20 Banking Regulations and Lending Practices

38:47 Investment Opportunities in Unrated Asset-Backed Finance

42:39 Navigating the Private Credit Ecosystem

43:07 Oaktree’s Growth and Brookfield Partnership

45:14 Wealth Channel Investment Strategies

46:42 Brookfield and Oaktree’s Unique DNA

48:56 Concerns and Opportunities in Private Credit

54:26 Howard’s Memos and Investment Philosophy

58:03 Conclusion and Final Thoughts

Editing and post-production work for this episode was provided by The Podcast Consultant.

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