| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | Since Inception |
|---|---|---|---|---|---|---|
| 20.2% | -5.3% | 15% | 60% | 80.3% | 102.2% | 68.5% |
Oaktree's Q1 2026 quarterly emphasizes the accelerating dispersion in credit markets, where healthy credits trade at reasonable spreads while distressed names face severe pressure. CCC-rated loans yield nearly 25% with spreads widening over 300 basis points, reflecting market concerns about refinancing ability under elevated rates. The software sector has experienced dramatic repricing due to AI disruption fears, comprising over 40% of loan market distress. Direct lending faces structural challenges including PIK reliance, liquidity mismatches, and redemption pressures across BDCs. Resurgent inflation driven by energy costs compounds pressure on struggling borrowers. Recovery rates remain depressed at 40% for first-lien loans versus historical averages. This environment creates distinct opportunities: performing credit managers must skillfully avoid losers to capture attractive yields, while opportunistic strategies can selectively target pockets of dislocation. The firm views this bifurcation as sustainable, driven by fundamental differences in borrower quality and refinancing capacity under the current rate environment.
Oaktree believes the credit markets are entering a new era of dispersion where the bulk of the universe remains healthy but a meaningful subset faces pressure, creating opportunities for skilled managers to avoid losers in performing strategies and selectively pursue dislocations in opportunistic strategies.
The firm expects dispersion in asset performance to accelerate with a meaningful subset of borrowers under pressure while the bulk of the credit universe remains in decent health. This creates opportunities for credit managers to demonstrate skill by avoiding losers and pursuing pockets of dislocation.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| May 14 | 2026 Q1 | - | CCC, credit, Direct Lending, dispersion, inflation, private credit, software | - | - |
| Feb 3 | 2025 Q4 | - | AI, credit, dispersion, private credit, real estate, Recovery, Spreads | - | Credit markets show significant dispersion with CCC-rated loans trading over 1,000 bps outside BBs, recovery rates well below long-term averages at 37.7% versus 62.3%, and… |
| Sep 30 | 2025 Q3 | AAPL, AMZN, GOOGL, META, MSFT, NVDA, TSLA | credit, distressed, healthcare, private equity, real estate, technology, Valuations | - | Artificial intelligence spending accounted for roughly 0.5% of 1H2025 GDP, or one-third of total growth. Absent AI, 1H2025 GDP growth would be closer to 0.9%.… |
| Jul 1 | 2025 Q2 | - | consumer, credit, Europe, private credit, real estate, Selection, Trade Policy, volatility | - | Private credit market has remained open for business amid volatility, successfully providing capital for new LBOs and refinancings despite tariff uncertainty and geopolitical concerns. European… |
| Mar 31 | 2025 Q1 | - | Asset-Backed, Biotechnology, credit, distressed, Mezzanine, Private Debt, special situations | - | Demand for mezzanine financing has broadened as borrowers seek flexibility including PIK options and wider covenants. An unprecedented $2.5 trillion of private equity dry powder… |
| Jan 30 | 2024 Q4 | - | - | - | - |
| Oct 27 | 2024 Q3 | AIR.PA, BA | Aircraft Leasing, Asset-backed Finance, Banking, Credit markets, interest rates, private credit, regulation | - | Asset-backed finance represents the next frontier of private credit as banks retreat due to regulatory pressures and capital requirements. Alternative lenders are positioned to fill… |
| Jul 30 | 2024 Q2 | AAPL, GOOGL, KSS, MSFT | CLO, credit, Dual Economy, high yield, rates, Refinancing, wealth | - | The dual economy creates challenges for credit markets as wealth concentration allows generous capital markets despite elevated rates. Many highly levered companies have postponed problems… |
| Feb 15 | 2023 Q4 | - | Banking, Commercial real estate, credit, high yield, inflation, interest rates, private credit, Structured Credit | - | Companies with high debt burdens are struggling with elevated interest rates after borrowing heavily during the easy money era. Many companies with leveraged loans or… |
| Oct 26 | 2023 Q3 | - | Clos, credit, distressed, high yield, interest rates, Leveraged Loans, private credit | - | Leveraged credit markets face elevated tail risk as weak borrowers struggle with higher interest rates. Many companies borrowed excessively when rates were near zero, creating… |
| Jul 27 | 2023 Q2 | - | CLO, CMBS, credit, Federal Reserve, high yield, interest rates, Leveraged Loans, private credit | - | The Fed is in the most aggressive rate-hiking cycle in 40 years, having increased rates by 500 basis points. The manager believes we've shifted into… |
| Apr 17 | 2023 Q1 | - | Banking, credit, Financial Crisis, real estate, regulation, risk management | - | SVB's failure amplifies preexisting wariness among investors and lenders, leading to further credit tightening and additional pain across industries. Regional and community banks likely to… |
| Oct 28 | 2022 Q3 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| Q4 2025 |
QualityYCG focuses on high-quality, recession-resistant toll takers that have historically outperformed over the long term but are currently experiencing underperformance in speculative markets. |
Quality Toll Takers Recession Resistant Undervalued Long Term |
AerospaceTransDigm represents a portfolio of aerospace parts with mission-critical, proprietary characteristics and little competition. |
Aerospace Parts Aftermarket Pricing Power Regulatory | |
Industrial GasesLinde operates in industrial gases with economies of scale advantages and take-or-pay contracts providing guaranteed income streams. |
Industrial Gases Economies of Scale Take or Pay Mission Critical Local Monopolies | |
Social MediaMeta demonstrates resilience of large networks through ability to adapt to competitive threats and regulatory changes. |
Social Media Network Effects AI Investment User Engagement Advertising | |
| Q3 2025 |
QualityYCG focuses on high-quality, recession-resistant toll takers that have historically outperformed over the long term but are currently experiencing underperformance in speculative markets. |
Quality Toll Takers Recession Resistant Undervalued Long Term |
AerospaceTransDigm represents a portfolio of aerospace parts with mission-critical, proprietary characteristics and little competition. |
Aerospace Parts Aftermarket Pricing Power Regulatory | |
Industrial GasesLinde operates in industrial gases with economies of scale advantages and take-or-pay contracts providing guaranteed income streams. |
Industrial Gases Economies of Scale Take or Pay Mission Critical Local Monopolies | |
Social MediaMeta demonstrates resilience of large networks through ability to adapt to competitive threats and regulatory changes. |
Social Media Network Effects AI Investment User Engagement Advertising | |
| Q2 2025 |
QualityYCG focuses on high-quality, recession-resistant toll takers that have historically outperformed over the long term but are currently experiencing underperformance in speculative markets. |
Quality Toll Takers Recession Resistant Undervalued Long Term |
AerospaceTransDigm represents a portfolio of aerospace parts with mission-critical, proprietary characteristics and little competition. |
Aerospace Parts Aftermarket Pricing Power Regulatory | |
Industrial GasesLinde operates in industrial gases with economies of scale advantages and take-or-pay contracts providing guaranteed income streams. |
Industrial Gases Economies of Scale Take or Pay Mission Critical Local Monopolies | |
Social MediaMeta demonstrates resilience of large networks through ability to adapt to competitive threats and regulatory changes. |
Social Media Network Effects AI Investment User Engagement Advertising | |
| Q1 2025 |
QualityYCG focuses on high-quality, recession-resistant toll takers that have historically outperformed over the long term but are currently experiencing underperformance in speculative markets. |
Quality Toll Takers Recession Resistant Undervalued Long Term |
AerospaceTransDigm represents a portfolio of aerospace parts with mission-critical, proprietary characteristics and little competition. |
Aerospace Parts Aftermarket Pricing Power Regulatory | |
Industrial GasesLinde operates in industrial gases with economies of scale advantages and take-or-pay contracts providing guaranteed income streams. |
Industrial Gases Economies of Scale Take or Pay Mission Critical Local Monopolies | |
Social MediaMeta demonstrates resilience of large networks through ability to adapt to competitive threats and regulatory changes. |
Social Media Network Effects AI Investment User Engagement Advertising |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| UNH | - | $23.9M | 46K | 35.3% | 0.83% |
| EAF | - | $13.7M | 1M | - | 0.19% |
| CRMT | - | $5.5M | 122K | 1,109.1% | 0.05% |
| FICO | - | $3.8M | 3K | - | 0.05% |
| MMC | - | $3.5M | 17K | - | 0.05% |
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| ATURA | - | $37.5M | 1M | -6.5% | 9.21% | Decreased |
| - | - | $31.2M | 461K | -22.6% | 1.98% | Decreased |
| CORP | - | $28.9M | 77K | -7.0% | 7.34% | Decreased |
| SWAB | - | $28.9M | 371K | -8.1% | 5.52% | Decreased |
| - | - | $22.5M | 428K | -6.9% | 4.58% | Decreased |
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| Communication Services | 16.0% | 17.6% | +1.6% |
| Consumer Staples | 20.8% | 19.4% | -1.4% |
| Information Technology | 11.7% | 10.8% | -0.9% |
| Health Care | 5.4% | 6.0% | +0.6% |
| Utilities | 1.7% | 2.1% | +0.4% |
| Industrials | 11.5% | 11.8% | +0.3% |
| Financials | 10.8% | 10.6% | -0.2% |
| TICKER | COMMENTARY |
|---|---|
| CPRT | We recently trimmed some of our mega-cap tech holdings and other outperformers and used the proceeds to buy more of our underperforming holdings such as Copart, Inc. |
| VRSK | We trimmed mega-cap tech holdings and redeployed capital into underperforming positions such as Verisk Analytics and initiated new positions in TransDigm and Linde. This reflects our strategy of buying cyclically underperforming assets. |
| TDG | TransDigm is a leading aerospace supplier with highly engineered components across commercial and military aircraft. Its portfolio creates near-monopolies with strong pricing power. |
| LIN | Linde is the largest industrial gas company globally, benefiting from scale advantages and long-term take-or-pay agreements that provide predictable recurring income streams. |
| Symbol | Company | Filed By | Filing Date | Filing |
|---|---|---|---|---|
| IMUX | Immuno Bio. Inc | Praetorian Capital | Apr 10, 2025 | SC 13G/A |
| LEE | LEE ENTERPRISES, Inc | Praetorian Capital | Mar 05, 2025 | SC 13D/A |
| AMRK | A-Mark Precious Metals, Inc | Praetorian Capital | Feb 14, 2025 | SC 13G/A |
| IMUX | Immuno Bio. Inc | Praetorian Capital | Jan 15, 2025 | SC 13G |
| STIM | lee enterprises, incorporated | Praetorian Capital | Nov 07, 2024 | SC 13D/A |
| HKHC | Horizon Kinetics Holding Corporation | Praetorian Capital | Oct 15, 2024 | SC 13G |
| GENK | GEN Restaurant Group, Inc | Praetorian Capital | Aug 05, 2024 | SC 13G/A |
| SLGD | Scotts Liquid Gold-Inc. | Praetorian Capital | May 13, 2024 | SC 13G |
| AMRK | A-Mark Precious Metals, Inc | Praetorian Capital | Apr 05, 2024 | SC 13G |
| GENK | GEN Restaurant Group, Inc | Praetorian Capital | Mar 15, 2024 | SC 13G |
| LEE | 1 lee enterprises, incorporated | Praetorian Capital | Jan 17, 2023 | SC 13D/A |
