Debt funds finally have their day in the sun – how to invest

Investors can now earn equity-like returns from debt funds and with less risk

Oaktree Capital Group LLC CEO Howard Marks
(Image credit: Brendon Thorne/Bloomberg via Getty Images)

In the world of bonds and fixed income, US billionaire Howard Marks is a titan. After making a name for himself at Citicorp in the 1970s and then TCW Group in the 1980s trading distressed bonds, he founded Oaktree Capital Management in 1995, focusing on high-yield debt, distressed debt and private equity. Today, Oaktree manages about $200 billion in assets for its clients across distressed-debt and private-equity funds. Over the years, Marks, one of the most successful debt investors of all time, has become famous for his so-called investment “memos”. These are emailed to clients and posted online, and contain his thoughts on everything from the state of the markets to the economy and even family life.

With 55 years of experience behind him, Marks has witnessed multiple investment markets and cycles, including crashes, inflation peaks, interest-rate cycles and booms. His memos have become particularly poignant in the last few years as he is one of the handful of remaining fund managers who experienced the rate-hiking and inflationary periods of the 1970s and 1980s.

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Rupert Hargreaves
Contributor and former deputy digital editor of MoneyWeek

Rupert is the former deputy digital editor of MoneyWeek. He's an active investor and has always been fascinated by the world of business and investing. His style has been heavily influenced by US investors Warren Buffett and Philip Carret. He is always looking for high-quality growth opportunities trading at a reasonable price, preferring cash generative businesses with strong balance sheets over blue-sky growth stocks.

Rupert has written for many UK and international publications including the Motley Fool, Gurufocus and ValueWalk, aimed at a range of readers; from the first timers to experienced high-net-worth individuals. Rupert has also founded and managed several businesses, including the New York-based hedge fund newsletter, Hidden Value Stocks. He has written over 20 ebooks and appeared as an expert commentator on the BBC World Service.