Solid as an OAK

Disclosures

The analyses and conclusions of Broyhill Asset Management, LLC (BAM") contained in this presentation are based on publicly available information. BAM recognizes that there may be confidential information in the possession of the companies discussed in the presentation that could lead these companies to disagree with BAMs conclusions. This presentation and the information contained herein is not a recommendation or solicitation to buy or sell any securities.

The analyses provided may include certain statements, estimates and projections prepared with respect to, among other things, the historical and anticipated operating performance of the companies, access to capital markets and the values of assets and liabilities. Such statements, estimates, and projections reflect various assumptions by BAM concerning anticipated results that are inherently subject to significant economic, competitive, and other uncertainties and contingencies and have been included solely for illustrative purposes. No representations, express or implied, are made as to the accuracy or completeness of such statements, estimates or projections or with respect to any other materials herein. Actual results may vary materially from the estimates and projected results contained herein. Accordingly, no party should purchase or sell securities on the basis of the information contained in this presentation. BAM expressly disclaims liability on account of any partys reliance on the information contained herein with respect to any such purchases or sales.
Accounts managed by BAM and its affiliates have invested in the equity of Oaktree Capital Group, LLC (OAK). It is possible that there will be developments in the future that cause BAM to change its position regarding the companies discussed in this presentation. BAM may buy, sell, cover or otherwise change the form of its investment regarding such companies for any reason. BAM hereby disclaims any duty to provide any updates or changes to the analyses contained here including, without limitation, the manner or type of any BAM investment.

Disclosures | 2

Agenda

Our Circle of Competence Introduction to Oaktree Competitive Landscape OAKs Edge OAK Value

Agenda| 3

Our Circle

Investing In Our Circle of Competence

We generally think that asset management is a terrific business. Theres a natural growth in global demand for financial assets and while the barriers to entry are fairly low, the barriers to success are fairly high. Brand, distribution and long-term performance make a big difference. That results in established companies for the most part generating high margins, high returns on capital and excellent free cash flow. - Mario Gabelli

Our Circle | 5

Sticky Assets Generate Durable Returns on Capital

Those who seek to succeed as long-term investors need time, capital, and fortitude. Time is important because gaps between fundamentals and expectations are not always closed quickly. So even in cases where the analysis is correct, the ability to see an
investment idea to fruition is important. This ability is increasingly challenged in an increasingly shortterm oriented world.

A stable base of investment capital is also crucial because great investment ideas arent worth anything if you have no money to invest. Investors are known to chase
performance. Said differently, rising asset prices draw additional investment, leading to potential overvaluation, and declining asset prices lead to investment withdrawal, pushing prices lower and possibly creating attractive opportunities. So when investments are most attractive, the pool of capital available to invest is often modest. And when investments are least attractive, capital is plentiful.

Investors with a stable and countercyclical base of capital stand at a huge advantage to those who work with fleet-footed capital.

Source: Legg Mason Capital Management , Michael Mauboussin

Our Circle | 6

It Pays To Be Greedy When Others Are Fearful

Cycle after cycle, one investment manager has consistently become most active as its peers have withdrawn from the market. This company is uniquely positioned to raise and deploy capital when others simply cannot. Management has a proven ability to precisely time and size new funds. The firm has built a strong brand by delivering consistent performance and putting the interest of its partners first. Asset raising is strictly a function of the investment opportunity set, rather than the ambition of a marketing department that aims to sell the largest fund at the peak of the cycle.
Capital Raised in Distressed Debt Funds
Billions of Dollars

12.0 10.0 8.0 6.0

10.9

4.5 3.6 1.6 0.1 0.4 0.3 0.4 0.4 0.8 2.1 2.1 1.3 1.2 2.7 1.8

4.0
2.0 -

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Company Filings

Our Circle | 7

An Introduction To OAK

Our Investment Thesis

Oaktree Capital Group (OAK) is a value-oriented investment management firm focusing predominantly on credit markets and specializing in distressed assets. An investment in OAK offers unit-holders a percentage interest in the sticky management fees and lucrative incentive fees generated by steady AUM growth and historically outsized returns. We believe the market is offering investors the ability to invest in this high quality asset manager today at a substantial discount to the true value of the underlying business.

An Introduction to OAK | 9

Brief Background
Oaktree (OAK) was formed in April 1995 by a group of Principals who first joined together in the mid-1980s to manage high yield bonds, convertible securities, distressed debt and principal investments at the TCW Group. Today, OAK is a leading global investment management firm focused on alternative markets, with an estimated $81 billion in assets under management as of September 30, 2012. The investment team is led by two legends of the industry - Chairman Howard Marks and President Bruce Karsh and guided by sound business principles: Oaktree is run for the benefit of its clients and their constituencies as well as for its owners and employees. Profit without performance, bigness for its own sake and prosperity through cost cutting are all explicitly rejected. Our earnings should grow if we achieve excellence in investing . . . but only then. To achieve excellence in investing, OAK emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt, control investing, convertible securities, real estate and listed equities. Headquartered in Los Angeles, the firm has over 700 employees and offices in 13 cities worldwide.

An Introduction to OAK | 10

Investing In A Controlled Company

In 2004 OAK sold a 6% stake in its business to a group of investors through a private placement, followed by an additional 6% in 2006 via another private offering. In an effort to increase liquidity for these investors and other insiders, OAK began trading on a private exchange in 2007, until March 2012 when the company offered a 20% economic interest to the public. Its worth noting that units were offered in 2007 at $44, despite the fact that assets under management at the time were less than half of current total assets. Today, investors can buy more liquid shares in the same company with substantially greater earnings power, at a discount to the initial offering. OAK ownership is currently split between two share classes with different rights. Oaktree Capital Group Class A units are publicly traded, representing a 20% economic interest in the underlying business and a 2% voting interest. The remaining 80% economic interest in the underlying businesses is held directly by insiders in Oaktree Capital Group Holdings LP. Insider ownership may be gradually converted to Class A shares for increased liquidity, and we expect this to occur at a rate of several percent annually. No principals of the firm draw a salary they are compensated entirely from profit sharing and unit grants.

An Introduction to OAK | 11

Competitive Landscape

A Sustainable Competitive Advantage

Truly durable competitive advantages arise from the intersection of supply and demand advantages, from the linkages of economies of scale with customer captivity. Competitive advantages based on economies of scale are in a class by themselves. They tend to be far longer lived than the other types and therefore more valuable. The best course is to establish dominance in a local market and then expand outward from it. Economies of scale, especially in local markets, are the key to creating sustainable competitive advantages. The appropriate strategy is to identify niche markets, understanding that not all niches are equally attractive. Ideally, it will also be readily extendable at the edges. The key is to think local.

Source: Bruce Greenwald and Judd Kahn, Competition Demystified

Competitive Landscape | 13

Driven By Dominance In Niche Markets

OAK has established itself as the preeminent distressed manager in the industry and as a result, AUM has grown 9% annually since 2007, to $81 billion today. We believe management understands the importance of this niche. Furthermore, we believe it is readily extendable at the edges as management targets "step-outs" into highly related fields.

While other asset managers have chosen to build broad platforms stretching across multiple asset classes, OAK has opted to remain true to its deep roots in credit. Assets are primarily structured as closed-end funds, but OAK also manages open-end and evergreen funds where investors have periodic withdrawal rights.
AUM by Asset Class
Control Investing Corporate Debt Open-end Funds Real Estate Listed Equities Convertible Securities Evergreen Funds Closed-end Funds

AUM by Fund Structure

Distressed Debt

Source: Company Filings

Competitive Landscape | 14

Secular Tailwinds
Alternative assets make up a small portion of global investable assets but are outgrowing traditional assets for a number of reasons, we believe are likely to continue for some time. With interest rates at generational lows and public market volatility near generational highs, investors are diversifying away from conventional asset classes with subpar returns.

We believe this trend plays right into OAKs strengths as the company has historically emphasized return generation by loss avoidance. Their high yield holdings, for example, have defaulted at a rate of 1.5% compared with 4.2% for the high yield market as a whole. OAKs focus on downside risk has translated into consistent returns with fewer drawdowns.
Global Alternative Assets Under Management
$10.0 $8.0 $6.4 $6.0 $4.0 $2.0 $2003 2004 2005 2006 2007 2008 2009 2010 $3.3 $3.9 $4.9
(in trillions)

$8.0

$7.9

$8.1

$8.6

Source: Company Filings

Competitive Landscape | 15

Created By A Low-Return World

The favorable return attributes of alternative assets are increasingly important as many liability-matched funds face significant shortfalls and are struggling to regain assets lost in 2008. The hundred largest pension plans were only 79% funded as of December 2011. This problem is exacerbated by high rates of expected returns on pension assets - a hurdle that is increasingly difficult to reach in todays low return environment. One way to achieve this return, however, is by committing assets for extended periods of time to managers with proven track records, such as OAK. This perpetuates the economies of scale enjoyed by the largest managers and reinforces the moat surrounding the best managers.

30% 20% 10% 0% -10% -20% -30% 2000 2001 2002 2003

Pension Funding Status

2004

2005

2006

2007

2008

2009

2010

2011

Source: Milliman 2012 Corporate Pension Funding Study

Competitive Landscape | 16

OAK Edge

A Counter-Cyclical Business Model

We view OAKs focus in distressed credit is a distinct advantage given the current economic environment. Growing investor demand for downside protection and income generation puts credit managers in the sweet spot today. Furthermore, the timing of OAKs fund raising contributes an element of counter-cyclicality to the business. OAK tends to raise and invest the most capital when others are halting capital raising activity. In doing so, the earnings power of the business actually increases in down markets. OAK capitalizes on the economic cycle and manages AUM growth selectively, careful to only raise enough money to fit the opportunity set. In times of distress, this opportunity set expands. As such, OAK is a natural beneficiary of macroeconomic uncertainty and market price volatility. In other words, crisis creates opportunity for Oaktree. This is clearly borne out in the data. Over the past decade, marked by rolling crises, AUM has grown over 300% at OAK, topped off by a 47% surge during the financial crisis. For perspective, consider that OAK garnered only 2% of the funds raised by the total private equity industry in both 2006 and 2007. However, from Q4-08 through the Q3-09, capital raised by OAK represented 248% of all funds raised by the private equity industry. For a firm that disavowals market timing, this is quite an impressive record.

OAK Edge| 18

Sticky Assets
OAK manages assets for 73 of the 100 largest pension plans in the United States alongside other long-term oriented strategies such as endowments and sovereign wealth funds. Since 1995 pensions have quadrupled their allocation to alternatives from 5% of assets to 20% in 2011.

We believe that large, top quartile managers will continue to receive the lions share of these flows going forward. This is a widely recognized phenomenon epitomized by the oldfashioned axiom, Nobody ever got fired for buying IBM. Simply stated, success breeds success.
Public Funds, 30% Corporate & Pensions, 28% Sovereign Wealth Funds, 8%

Endowments & Foundations, 8%

Insurance Companies, 8% Private HNW & Family Office, 7% Subadvisory - Mutual Funds, 4% Fund of Funds, 3% Oaktree & Other, 3%

Source: Company Filings

Unions, 1%

Competitive Landscape | 19

Generate Consistent Revenue

OAK generates earnings in the form of management fees - recurring annual income generated as a fixed percentage of capital commitments. Given the multi-year lock-up period and the propensity to re-invest after capital is distributed, this is a very sticky revenue base. For example, 68% of investors in OAKs newest distressed debt fund are returning clients from the same strategy with half of the balance coming from clients invested in other strategies. Fee related earnings are a greater percentage of total revenues than peers. This results in greater consistency OAK has paid a distribution in every quarter since being listed in 2007. Incentive fees are more variable, but given OAKs consistent performance record, we do not consider them significantly more uncertain over the long-term. In fact, Oaktree has realized incentive income annually for fifteen consecutive years which includes each of the last 35 quarters.
Sources of Revenue
1,400 1,200 1,000 800 600 Investment Income (Loss) Incentive Fees Management Fees
(in millions)

400
200 (200) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Company Filings

Competitive Landscape | 20

Superior Performance Is Critical To Success

What makes OAK unique is rather straightforward. Management is incredibly good at generating returns. Although barriers to entry may be low in the asset management industry, the barriers to success are quite high. And OAK has constructed a very formidable barrier. The key to success is performance and the track record below indicates that OAK has the key. Closed-end funds have returned 19% annually net of fees. All open-end funds have generated returns above their respective benchmarks since inception, with one exception which has produced 12.3% annual gains.
Gross IRRs of Oaktree Distressed Debt Funds as of September 30, 2012
70%

60%
50% 40% 30% 20% 10% 0% 29.0% 26.2% 21.2% 21.1% 12.4% 11.0% 15.4% 41.6% 44.0% 35.0%

57.9%

23.8% 18.5% 12.0% 10.8% 13.6%

19.5%

Source: Company Filings

OAK Edge | 21

But Superior Performance With Less Risk Is The Goal

Disciplined investing has produced consistent performance in periods of distress. The OAK High Yield Composite generated cumulative gains of 1.7% in the last four down markets, whereas the Lipper High Yield Mutual Fund Average suffered an aggregate 42% loss. The following reflects OAKs Primacy of Risk Control:

Superior investment performance is not our primary goal, but rather superior performance with less-than-commensurate risk. Above average gains in good times are not proof of a manager's skill; it takes superior performance in bad times to prove that those good-time gains were earned through skill, not simply the acceptance of above average risk. Thus, rather than merely searching for prospective profits, we place the highest priority on preventing losses. It is our overriding belief that, especially in the opportunistic markets in which we work, "if we avoid the losers, the winners will take care of themselves."
Down-Market Performance
10.0% 0.0% -10.0% -20.0% -30.0% -19.5% -25.3%

Cumulative Returns (1989-90, 1994, 1998-2002, and 2008)

1.7%

-40.0%
-50.0% Oaktree Composite -41.6% Citigroup High Yield Cash-Pay Capped Citigroup High Yield Cash-Pay Capped Lipper High Yield Mutual Fund Average - BB/B

Source: Company Filings

OAK Edge | 22

Valuation

What Is Mr. Market Missing?

The Alternative Asset Industry has been a poor investment for shareholders since a number of these smart investment managers began cashing out near the peak, selling a piece of their respective businesses to the public. Investors have not differentiated OAK from the more traditional, more leveraged and more pro-cyclical buy-out shop. The shares have been hit by sluggish economic activity, volatile capital markets and perhaps most importantly, headline risk surrounding carried interest taxation. All of which have combined to scare potential investors away from this exceptional business. We believe OAK has underperformed due to a general lack of understanding. The public partnership structure is complicated and limits the potential investor base in some instances. This complexity is compounded by a small float and limited voting power. The companys financial statements are not intuitive and a true representation of economic value requires a thorough analysis of various non-GAAP measures. Finally, there is a wide dispersion of opinion around the appropriate valuation yardstick and the future value of performance incentives. We are confident that the exceptional and highly profitable attributes of the business will become more apparent over time and as the fog of uncertainty is lifted, Mr. Market will award OAK with a more appropriate and higher multiple.

Valuation| 24

Whats It Worth?
We estimate intrinsic value using a sum of the parts methodology. This separates the earnings generated by recurring management fees from the more volatile incentive-based earnings, and allows us to value each accordingly. We believe that fee related earnings generated as a constant percentage of OAKs sticky asset base deserve a multiple in line with that of traditional asset managers such as Eaton Vance (EV) and T Rowe Price (TROW). This peer group trades at an average of 15x earnings and one could easily argue for a premium to the market and to the industry given OAKs competitive advantages and structural tailwinds.

We believe incentive-based fees deserve a considerably lower multiple given their higher volatility and uncertain time to realization. Its difficult to establish comps for this income source given that no asset manager earns fees solely on incentives, but we believe that a multiple of 6x is conservative given the consistency of OAKs track record. We then add OAKs investment interest in LPs and the off balance sheet accrued incentives, net of associate incentive compensation. We discount both line items by 20% to account for liquidity constraints, potential market risk, and the uncertain timing of distributions.
Valuation| 25

Adding It All Up

$25
15x 2013 Estimated Fee-related Earnings of $1.69

$7
Current Accrued Incentives Discounted 20%

$7
Current Investment In LPs Discounted 20%

$17
6x 2013 Estimated Incentive Income

$56
Potential Return: 38%

Downside Protection: $39

Source: Broyhill Asset Management Estimates

Valuation| 26

Downside Protection With Upside Optionality

While macroeconomic uncertainty may create short term price volatility, we believe the companys underlying fundamentals have plenty of downside protection: Asset growth may lag peers during strong rallies in risk assets, but OAKs counter-cyclical strategies should provide material upside in the event of a market dislocation or if global macroeconomic conditions deteriorate. Additionally, we believe OAKs more senior position in the capital structure provides greater stability given the income-producing nature of many of its investments. Finally, the average maturity of OAKs accrued carry should prove to be less susceptible to potential write-downs.

At the same time, we believe the OAK story has plenty of runway ahead of it:
OAK is targeting US and European High Yield, US and European Senior Loans, and Emerging Markets as long-term growth opportunities. We believe US real estate also represents near-term upside to fund raising efforts. OAK has significant potential for long-term asset growth driven by broader distribution channels and expanding mutual fund relationships. Vanguard could be an important partner in high yield and emerging market asset classes. And we havent even begun to discuss the companys 20% stake in DoubleLine, carried on the books at $20 million.
Valuation| 27

Risks to Thesis
We view downside as limited by the current value of steady management-fee income, investments in LPs, and accrued incentives. At recent trading levels, it would seem that Mr. Market is attributing no value to future incentive income, but there are risks to the thesis: The primary risk is key man risk. Marks or other key principals will eventually retire, could leave the firm, or may become unable to perform their investment responsibilities. AUM would be adversely impacted in such a situation. OAK is structured in a complicated manner which allows insiders to maintain control and to minimize taxes on behalf of the founders. This is further complicated by the emphasis on non-GAAP measures to judge performance, but as the industry gains attention we expect this headwind to subside over time. OAK shares could also face selling pressure from insiders who are allowed to convert a third of their holdings to Class A shares each year. Finally, pending changes to taxes on carried interest and capital gains represent an additional overhang on the stock. At the end of the day, we believe we are being well compensated for the risks we are taking and as Marks stated, the upside should take care of itself.

Valuation| 28

Bottom Line

Ideal investments are those few high-quality businesses run by superior management teams with significant ownership interest, favorable industry tailwinds, and a visible catalyst to realizing value. We believe OAK demonstrates all of these characteristics and currently trades at a significant discount to our estimate of intrinsic value. Management has consistently exhibited great skill in raising capital when investment opportunities are abundant and has demonstrated a consistent ability in investing capital at superior risk-adjusted rates of return. Put simply, this is OAKs moat and represents a unique and sustainable competitive advantage in the industry. OAK is recognizably the preeminent credit manager in the alternative investment industry, which is growing at rates above the broader asset management sector as institutional investors sacrifice liquidity for higher returns in todays low-return landscape. We expect accelerating cash distributions in 2013 and 2014 to serve as a catalyst for increased investor attention. As OAK harvests gains produced by the seeds sown during the last crisis, we believe the shares should be rewarded with a higher multiple in line with its traditional peers.

Valuation| 29

Appendix

Contact Information

Broyhill Asset Management, LLC

800 Golfview Park Post Office Box 500 Lenoir, NC 28645 Phone: Fax: 828 758 6100 828 758 8919

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Appendix| 31

Disclaimer
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. This material has been prepared solely for the purposes of illustration and discussion. Broyhill Asset Management is the marketing name for the investment management business conducted by Broyhill Asset Management, LLC. and its affiliates. Broyhill Asset Management, LLC is an SEC Registered Investment Advisor. Under no circumstances should the information contained herein be used or considered as an offer to sell, or solicitation of an offer to buy any security. Any security offering is subject to certain investor eligibility criteria as detailed in the applicable offering documents. The information contained herein is confidential and may not be reproduced or circulated in whole or in part. The information is in summary form for convenience of presentation, it is not complete and should not be relied upon as such. Any information, data, statement, opinions, or projections made herein may contain certain forward looking statements, projections, and information that are based on the beliefs of Broyhill Asset Management as well as assumptions made by, and information currently available to, Broyhill Asset Management. Such statements reflect the view of Broyhill Asset Management with respect to future events and are subject to certain risks, uncertainties and assumptions (including, but not limited to, changes in general economic and business conditions, interest rate and securities market fluctuations, competition from within and without the investment industry, new products and services in the investment industry, changes in customer profiles, and changes in laws and regulations applicable to Broyhill Asset Management). Should one or more of these other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. All information, including performance information, has been prepared in good faith; there are no representations or warranty expressed or implied, as to the accuracy or completeness, of the information, and nothing herein shall be relied upon as a promise or representation as to the past or future performance. This material may include information that is based, in part or in full, on hypothetical assumptions, models, and/or other analysis (which may not necessarily be described herein). No representations or warranty are made as to the reasonableness of any such assumptions, models, or analysis. The information set forth herein was gathered from various sources which are believed, but not guaranteed, to be reliable. Unless stated otherwise, any opinions expressed herein are current as of the date hereof and are subject to change at any time. Accordingly, neither Broyhill Asset Management nor its principals or affiliates make any representations as to the timeliness of any information in this presentation.

Appendix| 32