Treasure Hunters of the Financial Crisis

Five years ago, the global financial system was falling apart. Lehman Brothers had imploded. Banks had stopped lending. Foreclosure signs were as common as weeds on the front lawns of suburban homes.

And Bruce A. Karsh saw the buying opportunity of a lifetime.

Mr. Karsh, a low-key money manager from Los Angeles, had spent his career analyzing and trading the debt of companies. With the world economy buckling, the prices of corporate debt had plunged to levels suggesting that much of American industry was hurtling toward bankruptcy.

So Mr. Karsh, through his Oaktree Capital Management firm, plowed money into distressed debt at a torrid pace, investing more than $6 billion over a three-month stretch.

“Unless the second Great Depression lies ahead,” Howard S. Marks, Oaktree’s chairman, wrote to their clients on Oct. 6, 2008, “today’s purchases should produce substantial returns, and in a few years we’ll reminisce together about how easy it was to take advantage of the bargains of 2008-09.”