Howard Marks Doubts U.S. Exceptionalism Amid Global Challenges

Oak Tree Capital's Howard Marks, a prominent global investor, recently expressed his continued belief in the "American Exceptionalism" theory, although his stance has become less resolute. Marks, who is the co-chairman of Oak Tree Capital Management, stated that the U.S. remains the top destination for investors. However, he acknowledged that there are valid questions about whether the U.S. is still the best place it once was, and whether it is as reliable as it used to be.

Marks made these remarks during a panel discussion at the Qatar 2025 Economic Forum. He highlighted that the U.S. has maintained its global dominance for the past 80 to 100 years due to its vibrant economy, respect for free market systems, rule of law, capital markets, and innovation. Despite these strengths, Marks acknowledged that the U.S. is facing challenges that could impact its status as the premier investment destination.

Sheikh Saoud Salem Abdulaziz Al-Sabah, the managing director of the Kuwait Investment Authority, echoed similar sentiments. The sovereign wealth fund, which manages assets worth 100 billion, stated that it would not sell its U.S. assets. However, Al-Sabah did not directly address whether the fund would significantly increase its investments in the U.S. He emphasized that the U.S. still possesses the breadth and depth to maintain its exceptional status and continues to uphold the rule of law.

Al-Sabah also expressed concerns about the private equity market, noting that it has made many mistakes over the past 5 to 10 years without facing consequences. He highlighted three key issues: underwriting problems, inadequate exit mechanisms, and the shifting size of funds. Al-Sabah pointed out that some funds have grown to 100 billion, 150 billion, or even 200 billion, making it challenging to find buyers for these large portfolios, especially as many funds approach the end of their lifecycle.