The quarter’s most transformative theme is Oaktree’s aggressive move into data center power infrastructure. The 124% increase in Talen Energy (2.61% portfolio weight) combined with the new Core Scientific position (2.42%) represents nearly 5% allocation to companies directly benefiting from AI-driven electricity demand. Talen’s nuclear and natural gas assets provide essential baseload power for data centers, while Core Scientific operates high-performance computing infrastructure. This dual approach captures both the power generation and consumption sides of the AI infrastructure boom.

Oaktree executed a strategic energy sector rotation, adding Viper Energy as a top-5 5.07% position while reducing Chesapeake Energy from 15% to 11.35% and completely exiting Sitio Royalties. The Viper addition represents a preference shift toward Permian Basin mineral rights with zero operational risk over traditional E&P exposure. This rebalancing maintains substantial energy sector weight (~17% combined) while improving risk-adjusted return characteristics through royalty structures.

New positions in Telephone and Data Systems (3.05%) and EchoStar (0.97%), combined with expanded Liberty Global holdings, signal a telecom infrastructure thesis. These regional and satellite communications assets offer value plays on potential industry consolidation and 5G infrastructure deployment. The TDS stake particularly positions for possible U.S. Cellular strategic alternatives or T-Mobile partnership scenarios.

Brazilian banking exposure expanded dramatically with new Nu Holdings position (1.53%) complementing increased Itau Unibanco stake (1.96%, +15.10%). Combined with maintained XP Inc holdings, Oaktree commands over 4% portfolio allocation to Brazilian digital financial services. This concentration reflects conviction in Brazil’s fintech revolution, credit expansion cycle, and economic stabilization under improved fiscal management.

Continued increases in Grab Holdings (+4.54%) and explosive growth in Full Truck Alliance (+106%) demonstrate deepening conviction in Asian digital platforms. Addition of Sea Limited (+69%) and increased Kanzhun positions expand exposure beyond Southeast Asia into Chinese consumer internet and recruitment platforms. This geographic diversification captures platform economics across multiple Asian markets despite geopolitical headwinds.

Garrett Motion experienced its second consecutive quarterly reduction (-13.55%), while Cemex saw aggressive selling (-29.59%). Combined with complete exits from former holdings and Nokia’s reduction from major new position to minor stake, Oaktree demonstrates disciplined profit harvesting after strong runs. However, positions remain substantial enough to participate in further upside, exemplifying Marks’ philosophy of trimming winners while maintaining conviction.

Torm PLC remains untouched at 17.60% despite volatile shipping markets, reinforcing it as Oaktree’s highest-conviction position. Adding Star Bulk Carriers exposure (albeit reduced from prior levels) maintains diversified shipping exposure. The unchanged Torm position through quarters of portfolio churn signals Marks views current shipping fundamentals as secular rather than cyclical, with vessel supply constraints persisting for years.

While AngloGold Ashanti was reduced 15.41%, Barrick Gold received additional investment (+4.57%). The combined 8.5% gold miner allocation remains substantial, but the shift favors Barrick’s higher-quality asset base and superior management. This reflects selective position management within the precious metals complex rather than wholesale sector reduction, maintaining essential portfolio inflation hedges.