Oaktree Capital Management co-founder Howard Marks, whose estimated net worth sits at approximately $2.2 billion (£1.7 billion), told Indian entrepreneur Nikhil Kamath that his 48-year career in bonds began with a phone call he did not seek and a job he did not choose.
Speaking on thePeople by WTFpodcast, the 80-year-old said a superior at Citibank asked him in August 1978 to investigate a California financier named Michael Milken and a nascent asset class called high-yield bonds. 'That put me here today,' Marks said. 'Forty-eight years later.'
Oaktree, which Marks co-founded in 1995, now manages $224 billion (£177 billion) in assets as of 31 March 2026, according toBrookfield Oaktree Holdings. The firm is the world's largest investor in distressed securities.
Marks spent nine years in Citibank's equity department before being moved to bonds in May 1978. His employer had bet heavily on the Nifty Fifty—50 fast-growing US companies whose share prices were treated as untouchable. Marks said investors who bought those stocks the day he started work in September 1969 and held for five years lost approximately 95% of their money, with price-to-earnings ratios between 60 and 90.
When a new chief investment officer asked Marks to start a convertible bond fund, he agreed. Three months later came the call about Milken. 'I said, yes, I can do it,' Marks told Kamath. That placed him at the front of the high-yield bond market before most institutional investors knew it existed.
Asked why he stayed in bonds rather than returning to equities, Marks pointed to temperament. His parents were adults during the Great Depression. 'Don't put all your eggs in one basket, save for a rainy day, avoid risk,' he said.
Where stock investors see bonds as instruments with capped upside, Marks framed them differently. 'Predictable outcome, which is achieved almost every time,' he said. He added that 99% of Oaktree's high-yield bonds have paid interest and principal as promised. Funds led by Marks have returned an average of 19% per year net of fees over their lifetime, perOaktree's public filings.
He pointed to theS&P 500to illustrate why equity markets overshoot. The index has averaged roughly 10% annually over a century, yet the return in any given year almost never lands between 8% and 12%. In the 1990s it returned around 20% a year. In the 2000s, zero. 'Greed and fear,' Marks said. 'Excess and correction.'
Marks described Oaktree's core skill as identifying mispriced default risk. If the market prices a company's likelihood of non-payment at 5%, but Oaktree's analysis puts it at 2%, the borrower still pays an interest rate calibrated to the market's higher estimate. The gap between the actual risk and the compensation received is what Marks calls excess return.
'That's what we do,' he said. 'That's the essence of lending money.'
Source: International Business Times UK
