21% of this whale investor's portfolio is in this one stock

Oaktree Capital Management founder and veteran alternatives investor Howard Marks attracted a lot of attention last month when he released his latest memo – Part of which is entitled: This Time It Really Might Be Different

But as any seasoned investor will also tell you, the phrase "this time is different" can also be the most dangerous four words in investing. In his memo, Marks argued that the changes in the macro environment represent a need for "significant capital reallocation" - especially into investment-grade and high-yield credit (corporate bonds). 

"But if the developments I describe really constitute a sea change as I believe – fundamental, significant, and potentially long-lasting – credit instruments should probably represent a substantial portion of portfolios... perhaps the majority," Marks wrote last month.

Well, if Marks' latest 13F filing is anything to go by, he has also made a significant capital reallocation in Oaktree's global stocks portfolio. 

In just three months, Marks offloaded 36 stocks including such names as Uber (NASDAQ: UBER) and Airbnb (NASDAQ: ABNB). In its place, Marks has bought into a lot of names from outside the US - a sign that one of the world's most well-known investors is also testing the waters of emerging markets. 

Note: As with other 13F series pieces we have done in the past, all our information comes from 13f.info. 13F filings only have to feature long stock positions and have a delay of 45 days between quarter-end and the filing deadline. And as with everything you read on Livewire, do your own research.

Oaktree's Top Q3 Buys and Sells

• Market value: US$6.89bn, down from US$7.60bn

• New purchases: 35 stocks

• Additional purchases: 43 stocks

• Sold out of 69 stocks

• Reduced holdings in 66 stocks

• Top 10 holdings account for 58.5% of the portfolio

Source: Whalewisdom

Oaktree's Top Holdings

Source: Whalewisdom

Insight #1: Howard's selling

The first thing you immediately notice is that the list of sold positions is much longer than the list of purchases. The selling also seems to be indiscriminate in the sense that no sector is spared. 

For instance, Oaktree sold its stake in financing and insurance firm Ally Financial (NYSE: ALLY) and ETF manager WisdomTree (NYSE: WT). But Oaktree also sold its stake in numerous tech firms as well as its SPAC holdings. We discussed the rationale for Oaktree's SPAC buying spree in a previous edition of the 13F series.

The firm also seems to have offloaded a lot of biotechnology names from its portfolio including Novocure (NASDAQ: NVCR) and Omnicell (NASDAQ: OMCL).

And while it's not on this list, Oaktree has offloaded nearly all of its stake in Shopify (NYSE: SHOP) as well.

Insight #2: Howard's buying (but not where you expect)

While some investors still don't think emerging markets are a good play - or at worst, a walking value trap - Marks appears to be buying a lot of non-US companies. Oaktree's biggest individual purchase in the last three months has been South African-listed Anglogold Ashanti.  The gold and silver miner has projects in Africa, South America, and in two mines near Kalgoorlie, WA.

Ironically, the company was listed on the ASX until June 2023 but it has since consolidated to a single listing in the US.

Howard has also been buying Chinese video-sharing website Bilibili, although this may have been executed through its US ADR rather than its Shanghai listing.

He's also bought into H World Group - better known as the holding company for the Chinese hotel chain Huazhu Hotels. The chain runs more than 8,000 (yes, really) hotels in 18 countries. 

Insight #3: Howard's big bet

Marks is not known for his big bets and certainly not known in the same way that Bill Ackman may be known for. But more than 20% of Marks' portfolio is in one company, which isn't on either list. 

London-based shipping company Torm PLC owns and operates oil tankers. The company was added to Oaktree's portfolios in Q3 2020 and since then, the stock has rallied more than 400%. 

While more than 20% of Oaktree's portfolio is in this one name, perhaps the more amazing statistic is that Marks owns 63% of the company's outstanding shares. 

And you thought Gina Rinehart was high up on Liontown's share registry.

This article was first published on Livewire Markets.