Businessmodel of Oaktree Capital

Customer Segments

Oaktree Capital provides asset management and private equity services to re than 2,100 clients, including individuals and commercial entities. The Company’s clients include:

• Pension Funds, from a range of companies, institutions, and organisations;
• Municipal and Regional Government Bodies, including a range of government agencies and public organisations;
• Corporations and Commercial Entities, including companies from a range of sectors, such as the insurance and financial services industries;
• Universities, primarily from within the US;
• Charitable Organisations and Foundations, including numerous non-profits and foundations;
• Sovereign Wealth Funds, from various jurisdictions; and
• Individuals, including high-net-worth individuals and family offices. Oaktree Capital primarily serves clients in North America, notably its domestic market of the US, which accounts for 75% of its client base. The Company also serves client across Europe, Asia Pacific, Africa and the Middle East, and South America.

Value Propositions

Oaktree Capital provides value to its clients in the following ways:

• Its range of product offerings, with the Company providing a range of asset management services across six asset classes and jurisdictions;
• Its international reach, with the Company serving a global client base, including clients across the Americas, Europe, Asia Pacific, Africa, and the Middle East;
• The technical expertise of its personnel, with the Company employing highly-trained specialist investment professionals and experienced industry executives;
• Its research-backed offerings, with the Company employing an organised research methodology and applying its proprietary research to its investment activities; and
• Its customer service and communications, with the Company working closely with its clients on investment activities and consulting frequently with clients, providing service updates. ### Channels

Oaktree Capital operates a website at www.oaktreecapital.com, through which the Company provides information on its various products, services, and investment activities. The Company also operates an online client portal, accessible through its website, which enables clients to manage their accounts and track the performance of investments.

Oaktree Capital provides its services to clients through its team of in-house investment professionals and advisors, who operate out of the Company’s international network of offices, which spans 17 cities across 12 countries, of which the largest offices are in Los Angeles, London, New York City and Hong Kong.

Some of Oaktree Capital’s services are provided through third-party brokers, agents and services providers, which work in collaboration with the Company’s investment team.

Customer Relationships

Oaktree Capital provides some self-service offerings to its clients, through its online client portal, which allows client to monitor investments, manage accounts, and track performance without interacting with the Company’s team of investment professionals.

Oaktree Capital provides direct advisory and investment services to its clients, through its team of investment professionals, who work closely with clients over the period of their investments. These professionals consult with client on an ongoing basis, providing frequent updates and communications to ensure that clients are kept up to date with the performance of their investments.

Oaktree Capital provides additional support to its prospective and existing clients, with clients able to contact the Company’s various regional offices over the phone or via email. The Company also provides various market and investment insight papers and articles through its website, and is able to interact directly with clients through its social media accounts, including with Facebook, Twitter, LinkedIn, and YouTube.

Key Activities

Oaktree Capital is a global investment manager and asset management firm. The Company manages investments across six asset classes – Corporate Debt, Convertible Securities, Distressed Debt, Control Investing, Real Estate and Listed Equities.

The Company operates through a single business segment, which covers all of the Company’s investment management services. The Company’s operations are conducted through a group of operating entities collectively referred to as the Oaktree Operating Group. The Funds managed by Oaktree Capital include commingled funds, separate accounts and collateralized loan obligation vehicles. The Company has a number of offices across 12 countries, including the US, the UK, and Hong Kong.

Key Partners

Oaktree Capital collaborates with a range of partners in relation to its investment and asset management services. These partners include:

• Supplier and Vendor Partners, comprising suppliers of tools, and technology, as well as companies to which certain non-technical administrative function can be outsourced;
• Distribution and Service Partners, comprising a range of financial companies and professionals, including agents, advisors, and brokers, which provide services in support of, or on behalf of, the Company; and
• Strategic and Joint Venture Partners, comprising a range of companies with which the Company collaborates on joint projects and investments, occasionally through mutually-owned entities. Oaktree Capital has recently launched and investment partnership with AGRO Merchants Group to invest in the cold chain industry, and a partnership with Array Technologies, to which it provides capital and strategic support.

Key Resources

Oaktree Capital’s key resources are its financial resources and capital, its technology and communications infrastructure, its service and distribution channels, its partnerships, and its specialist investment personnel. Oaktree Capital owns and leases a number of properties, including an international network of 17 offices.

Cost Structure

Oaktree Capital incurs costs in relation to the management of its investments, the payment of professional fees to various agents and third-parties, the management and development of its online client portal, the maintenance of its communications and technology infrastructure, the operation of its service and distribution channels, the management of its partnerships, and the retention of its personnel.

In 2015 Oaktree Capital accrued total expenses in the amount of $940.91 million. The Company’s largest cost came in the form of compensation and benefits paid to its international workforce of 924 employees –  including 235 employee-owners – which totaled $404.44 million. The Company also incurred substantial general and administrative costs – which includes costs related to includes costs related to occupancy, and the contracting of outside auditors, tax professionals, legal advisers, research, consultants, communications and information services – which amounted to $120.78 million for the year.

Revenue Streams

Oaktree Capital generates revenue through the provision of asset management, investment, and advisory services to a range of commercial, institutional, and individual clients. The Company’s revenue is derived specifically from the collection of management fees and incentive income generated by the funds that it manages, as well as investment income earned from the investments it makes through its funds, third-party funds and other companies.

In 2015 Oaktree Capital generated annual revenue of $201.91 million, up on the $193.89 million recorded by the Company the previous year. The majority of the Company’s revenue is derived from its collection of management fees, which in 2015 totaled $753.81 million. This was followed by incentive income, which amounted to $263.81 million, with investment income accounting for $48.25 million in revenue.