Oaktree launched the Emerging Markets Opportunities strategy in 2012 as an expansion of our industry-leading Distressed Opportunities strategy, first established in 1988. The Emerging Markets Opportunities strategy seeks to achieve attractive, risk-adjusted returns by opportunistically investing in stressed, distressed and other value-oriented investments in the emerging markets.
Distressed opportunities in the emerging markets arise when excessive valuations and relaxed credit standards create sharp, sudden cycles of market dislocation. In contrast to developed markets, macroeconomic events and a misunderstanding among many investors of emerging market complexities give rise to more pronounced disruptions and an enhanced opportunity set for managers who possess the requisite experience, relationships and long-term investment horizon to identify and take advantage of such opportunities.
"We believe that experience and an understanding of cultural and legal differences within the emerging markets are critical to successful investing in these regions," says Julio Herrera, the strategy’s portfolio manager, who is a veteran of emerging market investing and restructuring across multiple market cycles and regions. "Given the nature of local and global crises and the fact that enduring investment capital in emerging markets is scarce, our experience and ability to manage long-term capital represents a competitive advantage."
Our approach emphasizes Oaktree's bedrock investment philosophy rooted in fundamental credit analysis, valuation discipline and a bias toward risk control. The Emerging Markets Opportunities team’s portfolio construction and investment management process is supplemented by an established, flexible external network of local advisors to enhance deal flow, access local market intelligence, and address the intricacies of jurisdictional differences and industry and local regulatory developments. In addition, the team works closely with other Oaktree investment groups to research, source and analyze opportunities.