The Howard Marks approach to CRE investing: Swinging for the fences or going against the tide?
How do you generate 20% IRRs (15-17% net) for investors across a $5 billion fund? Here are three relatively unique angles from Oaktree's flagship real estate fund...
1. Respond:
Many funds are consistently thematic. Core equity, housing, data centers, etc. But Oak Tree's flagship closed-end fund has significant flexibility. The fund has shifted its focus significantly across cycles and invests where others won't. Debt and equity. Private and public. International and domestic. Individual assets and platforms.
2. Find downside protection:
Oaktree's background is in distressed investments and debt, which are primary targets for this vehicle. Oak Tree proclaims to like these plays since they're more upside-skewed.
3. Diversify:
Each investment accounts for about 2% of fund AUM.
Ps - Howard Marks likely doesn't have a lot to do with real estate at Oaktree. The real estate team is led by 12 very experienced professionals, overseen by John Brady.
Read the Oaktree Real Estate Opportunities Strategy here.
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