NEW YORK (Reuters) - Howard Marks, co-founder and chairman of Oaktree Capital, the world’s largest distressed debt investor, said on Tuesday that his firm is buying European corporate debt.
“We buy corporate debt in Europe. We don’t go heavily into the periphery, but we are definitely active in Europe,” Marks told cable television network CNBC.
Oaktree’s website says the Los Angeles-based firm has around $78.8 billion under management. Marks said the firm primarily likes the corporate debt of Germany and the United Kingdom, which is “relatively safe.”
Marks also said the timing of when the U.S. Federal Reserve will end its monetary stimulus and how it will affect the economy is the greatest source of economic uncertainty, and that the Fed should begin ending the program to quell those fears.
“As long as that is out there in the future, that will be a deterrent to growth,” Marks said, and added that the uncertainty keeps businesses from investing. “Get it out of the way. Start winding it down, start to show that it won’t be fatal to the economy,” he said.
The Fed is buying $85 billion in Treasuries and agency mortgage debt per month in an effort to spur U.S. economic growth and drive down unemployment.
The central bank has also pledged to keep interest rates between zero and 0.25 percent at least until unemployment hits 6.5 percent, provided inflation stays under 2.5 percent. The March jobless rate was 7.6 percent. The Federal Reserve’s policy-making committee began a two-day meeting that will end Wednesday.
Marks also said that his firm currently likes real estate, particularly “lesser buildings in lesser cities.”
“We think that they have not come back from the crisis, and have a way to go,” Marks said.
Reporting by Sam Forgione; Editing by David Gregorio