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Oaktree Capital Group, LLC (NYSE: OAK) today reported its financial results for the fourth quarter and year ended December 31, 2012.
Adjusted net income (“ANI”) rose 187%, to $220.4 million in the fourth quarter of 2012, from $76.7 million in the fourth quarter of 2011, on a 71% increase in total segment revenues. The growth in revenues, to $447.0 million from $261.4 million, reflected substantially higher incentive income. Strong fee-related earnings (“FRE”) and incentive income, together with investment income proceeds from Oaktree funds and DoubleLine Capital LP and its affiliate (together, “DoubleLine”), drove distributable earnings up 382%, to $238.1 million in the fourth quarter of 2012 from $49.4 million in the fourth quarter of 2011.
ANI rose 67%, to $717.3 million in the year ended December 31, 2012 from $428.4 million in the prior year, on a 34% increase in total segment revenues. The growth in revenues, to $1.4 billion in 2012 from $1.1 billion in 2011, resulted from record annual incentive income and higher investment income. The incentive income, coupled with higher investment income proceeds from Oaktree funds and DoubleLine, drove distributable earnings to an annual record of $672.2 million in 2012, up 38% from $488.5 million in 2011.
Oaktree’s closed-end funds distributed a quarterly record $5.7 billion to investors in the fourth quarter of 2012 and an annual record $12.7 billion for full-year 2012.
Howard Marks, Chairman, said, “The fourth quarter of 2012 was a record quarter within a record year for Oaktree. Across the firm, our investment teams delivered the type of performance that is the hallmark of Oaktree’s risk-controlled, value-driven investment approach. Compelling returns across our many asset classes drove revenues, distributable earnings and distributions to our clients and unitholders to their highest levels ever.”
In addition to ANI, Oaktree calculates economic net income (“ENI”) to facilitate comparability with other alternative asset managers that use ENI as their profit measure. Unlike ANI, ENI measures incentive income based on market values. ENI fell 7%, to $221.7 million in the fourth quarter of 2012 from $237.2 million in the fourth quarter of 2011, and rose 236% for the annual period, to $971.7 million in 2012 from $289.5 million in 2011.