NEW YORK CITY—Brookfield Asset Management is acquiring a 62% stake in alternative investment manager Oaktree Capital Group. The companies did not announce the financials of the deal but the Financial Times has reported the acquisition was for approximately $4.7 billion.

Once the deal is complete, the two companies together will have approximately $475 billion of assets under management that generate about $2.5 billion in fee-related revenues annually. The acquisition, in short, will significantly boost Brookfield's alternative asset management portfolio, propelling it into the same league as Blackstone.

“This transaction enables us to broaden our product offering to include one of the finest credit platforms in the world, which has a value-driven, contrarian investment style, consistent with ours,” Brookfield CEO Bruce Flatt said in a prepared statement.

As part of the transaction, Brookfield will acquire all outstanding Oaktree Class A units for either $49 in cash or 1.0770 Class A shares of Brookfield per unit depending on the unitholder's choice. This represents a premium of 12.4% based on the closing price of Oaktree Class A units and Brookfield Class A Shares on March 12, 2019 and a 15.9% premium based on the 30-day Volume-Weighted Average Price of Oaktree Class A units.

The Oaktree Board of Directors has unanimously recommended that Oaktree unitholders approve the transaction.

Both Brookfield and Oaktree will continue to operate their respective businesses independently with each remaining under their current brand and run by existing management and investment teams.

Howard Marks will continue as co-chairman of Oaktree, Bruce Karsh as co‑chairman and chief investment officer, and Jay Wintrob as CEO. Marks and Karsh will continue to have operating control of Oaktree as an independent entity. In addition, Marks will join Brookfield's board of directors.

“Our firms share a culture that emphasizes both investing excellence and integrity, and our businesses mesh without overlapping or conflicting,” Marks said in a prepared statement.

Perella Weinberg Partners acted as sole financial advisor and Simpson Thacher & Bartlett and Munger, Tolles & Olsen acted as legal advisors to Oaktree. Weil, Gotshal & Manges and Torys acted as legal advisors to Brookfield. Sandler O'Neill & Partners acted as financial advisor and Mayer Brown served as legal advisor to the Special Committee of Oaktree's Board of Directors.

Instant Insights /

Brookfield Buys Majority Stake in Oaktree Capital for Reported $4.7B

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