Howard Marks (investor)
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Howard Stanley Marks (born April 23, 1946) is an American investor and writer. He is the co-founder and co-chairman of
Oaktree Capital Management Oaktree Capital Management is an American global asset management firm specializing in alternative investment strategies. As of March 31, 2022, the company managed $164 billion for its clientele. The firm was co-founded in 1995 by a group that ...
, the largest investor in
distressed securities Distressed securities are securities over companies or government entities that are experiencing financial or operational distress, default, or are under bankruptcy. As far as debt securities, this is called distressed debt. Purchasing or holding ...
worldwide. In 2022, with a net worth of $2.2 billion, Marks was ranked No. 1365 on the
Forbes ''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also re ...
list of billionaires. Marks is admired in the investment community for his "memos", which detail his investment strategies and insight into the economy and are posted publicly on the Oaktree website. He has also published 3 books on investing. According to
Warren Buffett Warren Edward Buffett ( ; born August 30, 1930) is an American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway. He is one of the most successful investors in the world and has a net w ...
, "When I see memos from Howard Marks in my mail, they're the first thing I open and read. I always learn something, and that goes double for his book." Marks focuses on risk management and says that investors should set
investment strategy In finance, an investment strategy is a set of rules, behaviors or procedures, designed to guide an investor's selection of an investment portfolio. Individuals have different profit objectives, and their individual skills make different tactics an ...
according to their personal situations and ask themselves whether they worry more about the risk of losing money or the risk of missing an opportunity. Marks believes that it is hard to gain an investment advantage through research since so many smart people are doing it already; the ways to get an advantage are through better inferring the consequences implied by current company data, managing the psychology of investing, and assessing the present stage of the business / market cycle. He hopes to have average returns during a
bull market A market trend is a perceived tendency of financial markets to move in a particular direction over time. Analysts classify these trends as ''secular'' for long time-frames, ''primary'' for medium time-frames, and ''secondary'' for short time-fram ...
, while minimizing losses during
bear markets A market trend is a perceived tendency of financial markets to move in a particular direction over time. Analysts classify these trends as ''secular'' for long time-frames, ''primary'' for medium time-frames, and ''secondary'' for short time-fram ...
due to his belief that losses do more harm than any benefit investors obtain from gains. Marks does favor using
market timing Market timing is the strategy of making buying or selling decisions of financial assets (often stocks) by attempting to predict future market price movements. The prediction may be based on an outlook of market or economic conditions resulting from ...
strategies to have cash available to be invested during a downturn. Marks notes that it is important for investors to admit what they don't know instead of believing something is certain. He aims for a "high batting average" over "home runs". Funds led by Marks have produced long term returns net of fees of 19% per year. Investors are primarily
pension fund A pension fund, also known as a superannuation fund in some countries, is any plan, fund, or scheme which provides retirement income. Pension funds typically have large amounts of money to invest and are the major investors in listed and priva ...
s and
sovereign wealth fund A sovereign wealth fund (SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such ...
s.


Early life and education

Marks was born in 1946 and raised in
Queens, New York Queens is a borough of New York City, coextensive with Queens County, in the U.S. state of New York. Located on Long Island, it is the largest New York City borough by area. It is bordered by the borough of Brooklyn at the western tip of Long I ...
. Although his family was ethnically
Jewish Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""The ...
, he was raised as a
Christian Scientist Christian Science is a set of beliefs and practices associated with members of the Church of Christ, Scientist. Adherents are commonly known as Christian Scientists or students of Christian Science, and the church is sometimes informally know ...
. He attended the
Wharton School of the University of Pennsylvania The Wharton School of the University of Pennsylvania ( ; also known as Wharton Business School, the Wharton School, Penn Wharton, and Wharton) is the business school of the University of Pennsylvania, a Private university, private Ivy League rese ...
for undergraduate studies where he was a member of
Pi Kappa Alpha Pi Kappa Alpha (), commonly known as PIKE, is a college fraternity founded at the University of Virginia in 1868. The fraternity has over 225 chapters and colonies across the United States and abroad with over 15,500 undergraduate members over 30 ...
fraternity. He graduated ''
cum laude Latin honors are a system of Latin phrases used in some colleges and universities to indicate the level of distinction with which an academic degree has been earned. The system is primarily used in the United States. It is also used in some Sou ...
'' in 1967 with a major in finance and a minor in Japanese Studies. In 1969, at age 23, he earned a
Master of Business Administration A Master of Business Administration (MBA; also Master's in Business Administration) is a postgraduate degree focused on business administration. The core courses in an MBA program cover various areas of business administration such as accounti ...
in Accounting and Marketing from the
University of Chicago Booth School of Business The University of Chicago Booth School of Business (Chicago Booth or Booth) is the graduate business school of the University of Chicago. Founded in 1898, Chicago Booth is the second-oldest business school in the U.S. and is associated with 10 N ...
where he won the George Hay Brown Prize. In 1975 he became a CFA® charterholder.


Career


Citicorp

From 1969 until 1978, Marks worked at
Citicorp Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking ...
, first as an equity research analyst and then as the company's Director of Research. From 1978 to 1985, he served as a Vice President, as well as a senior portfolio manager overseeing convertible and
high-yield debt In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events, ...
. Citibank allowed him to move to
Los Angeles Los Angeles ( ; es, Los Ángeles, link=no , ), often referred to by its initials L.A., is the largest city in the state of California and the second most populous city in the United States after New York City, as well as one of the world' ...
in 1980.


TCW Group

In 1985, Marks joined
TCW Group TCW Group is an asset management firm based in Los Angeles, California. History Founded by Robert Addison Day in 1971 and headquartered in Los Angeles, TCW manages a broad range of investment products. The TCW Group was originally known as Trus ...
where he led the groups that were responsible for investments in
high-yield debt In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events, ...
and convertible securities, and in 1988 he and
Bruce Karsh Bruce Karsh (born October 10, 1955) is an American investor and former lawyer. In the early 1980s he was an appellate clerk to former Supreme Court of the United States justice Anthony M. Kennedy, and later worked at O'Melveny & Myers, Sun Life ...
organized one of the first
distressed debt Distressed securities are securities over companies or government entities that are experiencing financial or operational distress, default, or are under bankruptcy. As far as debt securities, this is called distressed debt. Purchasing or holding s ...
funds from a major financial institution. In 1995, he, Karsh, and 3 others decided to leave to start their own firm and petitioned TCW to let them continue managing the funds they managed at TCW, giving TCW a portion of the management fees; when TCW refused, the 5 partners left the company and founded
Oaktree Capital Management Oaktree Capital Management is an American global asset management firm specializing in alternative investment strategies. As of March 31, 2022, the company managed $164 billion for its clientele. The firm was co-founded in 1995 by a group that ...
in
Los Angeles Los Angeles ( ; es, Los Ángeles, link=no , ), often referred to by its initials L.A., is the largest city in the state of California and the second most populous city in the United States after New York City, as well as one of the world' ...
.


Oaktree

After being founded in 1995, Oaktree grew rapidly, focusing on
high-yield debt In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events, ...
, distressed debt, and private equity. During the
financial crisis of 2007–08 Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...
, Oaktree raised $10.9 billion, the largest distressed debt fund in history, to buy distressed assets, which "paid off richly for his investors". In April 2012, Oaktree became a
public company A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange (l ...
via an
initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...
on the
New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed c ...
, raising $380 million by selling 8.84 million shares for $43 each. In March 2019,
Brookfield Asset Management Brookfield Asset Management Inc. is a Canadian multinational company that is one of the world's largest alternative investment management companies, with over US$725 billion of assets under management in 2022. It focuses on direct contr ...
acquired 62% of Oaktree. Marks and other members of Oaktree own 38% of the company and have full control of Oaktree's day-to-day operations.


Organizations

From 2000 to 2010, he chaired the Trustees' Investment Board at The University of Pennsylvania. He is a member of the New York Society of Security Analysts and chairs the Investment Committees of the
Metropolitan Museum of Art The Metropolitan Museum of Art of New York City, colloquially "the Met", is the largest art museum in the Americas. Its permanent collection contains over two million works, divided among 17 curatorial departments. The main building at 1000 ...
, where he is a trustee, and the Royal Drawing School (London).


Personal life

Marks' first marriage ended in divorce. He has one biological child with his second wife Nancy (née Freeman): Andrew Marks, who runs Freemark Partners, the investment firm for the Marks family, and one step-child: Jane Hait, from Nancy's prior marriage.


Philanthropy

In 1992, Marks created the Howard S. Marks Terms Scholarship to provide renewable scholarships to undergraduates at the
University of Pennsylvania The University of Pennsylvania (also known as Penn or UPenn) is a private research university in Philadelphia. It is the fourth-oldest institution of higher education in the United States and is ranked among the highest-regarded universitie ...
. In 2009 he endowed the Marks Family Writing Center at the university.


Residences

In 2010, Marks bought an oceanfront property in East Hampton for $30 million. In May 2012, he and his wife purchased a duplex unit at
740 Park Avenue 740 Park Avenue is a luxury cooperative apartment building on the west side of Park Avenue between East 71st and 72nd Streets in the Lenox Hill neighborhood of Manhattan, New York City. It was described in ''Business Insider'' in 2011 as "a l ...
for $52.5 million. In 2013, Marks sold his mansion in
Malibu, California Malibu ( ; es, Malibú; Chumash: ) is a beach city in the Santa Monica Mountains region of Los Angeles County, California, situated about west of Downtown Los Angeles. It is known for its Mediterranean climate and its strip of the Malibu ...
for $75 million. In 2015, he purchased a house in
Beverly Hills Beverly Hills is a city located in Los Angeles County, California. A notable and historic suburb of Greater Los Angeles, it is in a wealthy area immediately southwest of the Hollywood Hills, approximately northwest of downtown Los Angeles. Bev ...
for $23.7 million. In 2017, he purchased the house next door to his house in Beverly Hills for $9.7 million. In 2019, he purchased parcels in
Amagansett, New York Amagansett is a census-designated place that roughly corresponds to the hamlet by the same name in the Town of East Hampton in Suffolk County, New York, United States, on the South Shore of Long Island. As of the 2010 United States Census, t ...
, near his East Hampton property, for $35 million.


Political affiliation

Marks is a member of the
Democratic Party Democratic Party most often refers to: *Democratic Party (United States) Democratic Party and similar terms may also refer to: Active parties Africa *Botswana Democratic Party *Democratic Party of Equatorial Guinea *Gabonese Democratic Party *Demo ...
and has been critical of the
economic policy of Donald Trump The economic policy of the Donald Trump administration was characterized by the individual and corporate tax cuts, attempts to repeal the Affordable Care Act ("Obamacare"), trade protectionism, immigration restriction, deregulation focused ...
. In 2016, he contributed over $200,000 to the
Hillary Victory Fund The Hillary Victory Fund was a joint fundraising committee for Hillary for America (the Hillary Clinton presidential campaign organization), the Democratic National Committee (DNC), and 33 state Democratic committees. , the Fund had raised $61 m ...
and similar organizations. However, he has criticised the tax plan proposed by Representative
Alexandria Ocasio-Cortez Alexandria Ocasio-Cortez (; ; born October 13, 1989), also known by her initials AOC, is an American politician and activist. She has served as the U.S. representative for New York's 14th congressional district since 2019, as a member of th ...
(a Democrat representing part of New York), saying "a great deal of America’s economic progress has resulted from people’s aspiration to make more and live better".


Books

* 2011: ''The Most Important Thing: Uncommon Sense for the Thoughtful Investor'' * 2012: ''The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor'' * 2018: ''Mastering the Market Cycle: Getting the Odds on Your Side''


References

{{DEFAULTSORT:Marks, Howard Living people 1946 births American billionaires Jewish American writers American money managers Wharton School of the University of Pennsylvania alumni University of Chicago Booth School of Business alumni American financial analysts Private equity and venture capital investors CFA charterholders Citigroup people 21st-century American Jews