In the news …
Oil prices under $40 a barrel has investors like Howard Marks licking their chops.
Marks is co-chairman of Oaktree Capital Group (OAK), a firm best-known for banking profits on distressed debt. On Tuesday, Marks told investors that the current environment for sussing out value in troubled companies looks like the best since the collapse of Lehman Brothers. Devin Banerjee at Bloomberg captured Marks’ remarks on energy-sector credit, made Tuesday at a Goldman Sachs-sponsored conference in New York
Deep-value focused Third Avenue Management is closing its newest high-yield bond mutual fund amid heavy withdrawals and weak performance.
The Third Avenue Focused Credit Fund (TFCVX) is closing, squeezed by waves of redemptions, but investors can’t get their money back for “up to a year or more.”
Why the delay? The asset manager says that selling the fund’s junk bonds all at once would decimate the value of the remaining assets.
David Barse, Third Avenue’s chief executive, disclosed the closure and liquidation plan in a letter to shareholders on Thursday. Shareholders will get an unspecified portion of $789 million fund next week; more importantly, shareholders will receive rights to a newly created trust tasked with gradually selling down the remaining bonds the portfolio. Proceeds from the sales will be meted out incrementally, the letter says.