Howard Marks: Opportunities in China and Italy

In this interview with Bloomberg, Howard Marks shares his views on the US economy, the opportunities he sees in China, and the debt woes in the country’s real estate market.

Here are a few key take-aways from the interview:

  • The era of ultra-low interest rates is over, ushering in a prolonged period of lending, fixed-income investing, and credit investing. The Federal Reserve’s rapid cycle of rate hikes has ended the loose monetary policy of the past two decades. Marks believes the Fed may have erred by keeping interest rates too low for too long, leading to investments that otherwise would not have been made.
  • Despite geopolitical tensions, Oaktree will continue to invest in China as its current investments continue to yield good returns.
    Oaktree currently holds 40 billion yuan ($7.52 billion) across stocks, public and private debt, and real estate in the Greater China region and is seeking more opportunities in China’s loan market.
    Marks believes the US and China will be rivals rather than enemies, and that they will “get along”.
  • Oaktree Capital Management has taken ownership of the Italian football club Inter Milan after the club’s Chinese owner defaulted on a €395 million loan.
    The investment firm emphasized its commitment to the long-term prosperity of Inter Milan and its shared ambitions with the club’s passionate fanbase.

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