Reuters reports that the chairman of the world's largest distressed debt investor on Tuesday warned that the "unsound practices" of before the financial crisis are creeping back into credit markets, with private equity firms bidding increasingly high prices for companies.
Howard Marks, co-founder and chairman of Los Angeles-based Oaktree Capital, told a conference that investors, in their search for returns, were becoming overly confident while the economic background was still gloomy.
In a presentation titled "Investing in Uncertain Times," Marks noted the ease with which lowly rated companies were issuing debt this year, how companies were paying out record dividends to their shareholders and the increasingly high debt-to-equity multiples private equity firms were paying for companies amid a resurgence in deals.
"We have a world in which nobody is thinking bullish. Everybody's worried and yet people are acting bullish," Marks told an audience….