Capital Allocators – Inside the Institutional Investment Industry Top 5 of 2025: #1: Howard Marks
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Dec 29, 2025 
Howard Marks, co-founder of Oaktree Capital Management and renowned for his insightful investor memos, dives into the evolution of credit markets and the risks associated with private credit. He reveals valuable lessons from past market experiences, emphasizing the importance of valuation. Marks also shares insights into Oaktree's disciplined investment philosophy and highlights the current landscape's challenges, including soft underwriting standards and the impacts of rising rates on private equity. Reflecting on investor psychology, he stresses the necessity of adapting through cycles.
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Invest Against The Crowd
- Buy assets when others hate them and avoid overcrowded trades when everyone loves them.
- Recognize pendulum swings and don't chase the late-stage crowd.
The Race To Lower Standards Persists
- Today private credit standards are somewhat undemanding but not as terrible as past excesses.
- A race-to-the-bottom dynamic still exists because lower standards let some bidders win deals.
Make Risk Control Cultural
- Embed risk control and consistency in firm culture and hire people who value avoiding big losses.
- Emphasize exclusion of losers: protecting capital matters more than finding winners.
