Oaktree Capital Management's Co-Chief Executive Officer Armen Panossian has issued a warning that markets are pricing in a range of fundamental issues too quickly, leading his firm to hold onto cash and wait for more favorable conditions. Panossian noted that post-pandemic "extremely abundant" liquidity, a persistent willingness among investors to stay invested, and strong historical corporate performance have collectively led market participants to selectively overlook potential economic data. He stated that a widespread belief that U.S. President Trump will not take any actions that fundamentally harm the economy has further strengthened market resilience. Panossian remarked, "When you layer in the impact of the Iran war, and then layer in the software industry pain that we expect to emerge over the next few years, it's a bit puzzling why the market is so strong." He cautioned that investors are significantly underestimating the fundamental risks facing credit markets. Oaktree Capital is owned by Brookfield Asset Management, which reached an agreement late last year to acquire the remaining shares of the distressed debt specialist. Panossian indicated that the two firms are "building the pipelines" to combine Oaktree's credit capabilities with Brookfield's asset management expertise to uncover global investment opportunities. Currently, Oaktree is positioned to wait for the right moment. Panossian pointed out that there are not many "fat pitches" in the market currently—meaning deeply discounted debt or equity assets worth buying aggressively. The firm is seeking high-quality companies with weak balance sheets but strong fundamentals, while also accumulating as much "dry powder" as possible. Regarding recent redemption pressures on Business Development Companies (BDCs) due to concerns over the software sector and valuations, Panossian expressed surprise that banks have not tightened lending to private credit instruments more significantly. "There has been some tightening, but not nearly to the extent I expected."