Brookfield Asset Management has agreed to acquire almost two-thirds of Oaktree Capital Management, the firms announced Wednesday.
Brookfield plans to buy up Oaktree shares amounting to about 62 percent of the business, including all outstanding class-A units and about 20 percent of class-B units held by the founders, senior management, and current employees of Oaktree. The deal terms value each unit at $49 in cash or 1.077 class-A shares of Brookfield.
Although Brookfield will become the majority owner of Oaktree following the acquisition, both firms will continue to operate their businesses independently under the leadership of their existing management and investment teams. Howard Marks and Bruce Karsh will remain co-chairmen of Oaktree, with Karsh continuing to serve as chief investment officer and Jay Wintrob as chief executive. Marks will also join Brookfield’s board of directors.
In a statement, Marks said that the Oaktree management team was “excited about the combination of support and independence” they expect from Brookfield.
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According to the announcement, the two alternative asset managers — which control a combined $475 billion — will be “partnering to leverage their strengths.” This will include broadening Brookfield’s product offering to include Oaktree’s credit platform, which Brookfield CEO Bruce Flat described in a statement as “second to none.”
Brookfield, which has more than $350 billion under management, offers public and private investment products with a focus on real estate, renewable power, infrastructure, and private equity. Oaktree’s investment offerings include credit, private equity, real assets, and listed equities.
Under the agreement, Oaktree unitholders — including founders, senior management, and current and former employees — will be able to sell their remaining shares to Brookfield beginning in 2022. Under the liquidity schedule for selling these units, the earliest time that Brookfield could own 100 percent of the Oaktree business is 2029.
The companies expect the transaction to close in the third quarter of this year.