_Economy and Finance

Howard Marks: Distressed Debt and Real Estate Investment Outlook (Source: ValueWalk, December 17, 2013 ) Howard Marks, Chairman of Oaktree Capital Group, shared his views at the 2013 Goldman Sachs Financial Conference regarding the U.S. Federal Reserve’s tapering policy. He argued that markets had already priced in much of the tapering effect, so the actual implementation might not cause a sharp rise in yields. Marks noted that the current economic recovery is weaker than past cycles, with moderate inflation. He estimated that the 10-year Treasury yield would remain between 3% and 4%, regardless of tapering. Institutional investors such as U.S. pension funds and endowments typically target returns of 7.5–8%. However, with Treasuries yielding 1–3%, investment-grade bonds around 4%, and equities at 6–7%, investors are increasingly turning to alternatives. Marks highlighted that hedge funds have struggled to deliver such returns, while private equity and private real estate can gen...