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jerryking : distressed_debt   27

Toronto investment bank Infor prepares for wave of corporate credit restructurings -
February 17, 2019 | The Globe and Mail | by ANDREW WILLIS.

Infor was founded in 2015 and focuses on providing merger and acquisition and financing advice to growth companies in the mining, financial services, cannabis and technology sectors. The employee-owned firm is home to two dozen bankers and has advised on 1,800 transactions valued at $250-billion. Chief executive officer Neil Selfe said the decision to move into restructuring reflects a view that a downturn is overdue in credit markets.

“We believe the current economy cycle, bolstered by extended periods of low interest rates and excess leverage, is in its final stages and a substantial corporate restructuring pandemic is nearing,” Mr. Selfe said. Infor is well positioned to advise distressed borrowers, he said, because “as the largest providers of debt, Canadian banks are conflicted in helping corporations navigate this environment.”
Andrew_Willis  Bay_Street  bow_wave  distressed_debt  hiring  Infor  investment_banking  preparation  restructurings 
february 2019 by jerryking
Howard Marks, the ultimate bargain hunter
October 17, 2018 | Financial Times | Javier Espinoza.

Howard Marks : “I have a high degree of creativity,” he says. "In order to outdo others you have to think differently from others. If you don’t, how can you expect to have superior results?” His new book is Mastering the Market Cycle.

Mr Marks is the founder of Oaktree Capital Management. Based in Los Angeles, it is one of the world’s most prominent value investors. He makes money by finding situations where he can buy low, especially distressed assets, then sell high.

Today, market conditions mean Mr Marks faces as strong a challenge as ever: trying to sniff out bargains when valuations are steep, debt is cheap and competition fierce.

In 2015 Oaktree raised about $12bn for its distressed-debt fund. It was the second-largest amount in its history......The veteran financier regards delaying gratification as key to success. Like Warren Buffett, he believes waiting for the right investments is an important part of the process.

He often cites Hyman Minsky, the US economist famous for his work on bubbles and crashes....as Minsky would say, ‘there are always cycles’.”

“There are up-cycles with too much enthusiasm, too little discipline and too little risk aversion," he says. "And there are down-cycles when the economy does less well, corporations do less well, security prices fall and there is too much risk aversion, too much fear.”

“A quote said to have been uttered by Mark Twain is: ‘History does not repeat but it does rhyme’. The point is that the patterns of cycles do repeat and the details – the amplitude, the timing, the duration, the speed and the reasons – are different from cycle to cycle but the themes that underlie the causes of cycles are similar from one to the next.”

 
bargain_hunting  books  boom-to-bust  creativity  distressed_debt  economic_cycles  financiers  founders  Howard_Marks  investors  Mark_Twain  moguls  money_management  investment_research  Oaktree  patterns  pattern_recognition  quotes  think_differently  value_investing/investors 
october 2018 by jerryking
Paul Singer, Doomsday Investor
August 27, 2018 | The New Yorker | By Sheelah Kolhatkar.

Paul Singer, ,
The head of hedge fund Elliott Management, has developed a uniquely adversarial, and immensely profitable, way of doing business.

Bush had co-founded Athenahealth, a platform that digitizes patient medical records and billing claims for hospitals and health-care providers, in 1999, and he had built it into an enterprise with more than a billion dollars in revenue. One of the firm’s marketing taglines was that it freed doctors and nurses to spend more time doing what they loved—practicing medicine—and less time on paperwork. Athena served more than a hundred thousand health-care providers...... Paul Singer, the founder of Elliott Management and one of the most powerful, and most unyielding, investors in the world. Singer, who is seventy-three, with a trim white beard and oval spectacles, is deeply involved in everything Elliott does. The firm has many kinds of investments, but Singer is best known as an “activist” investor, using his fund’s resources—about thirty-five billion dollars—to buy stock in companies in which it detects weaknesses. Elliott then pressures the company to make changes to its business, with the goal of improving the stock price.....Hedge funds, especially activist hedge funds, are established users of private-investigation services.....The investor acknowledged that Bush was far from perfect, and said that “there is a role for activists to hold managements accountable.” But the investor worried that the focus on the bottom line would undermine the innovative spirit that had made Athena successful. “.....The idea that companies exist solely to serve the interests of shareholders—rather than also to serve workers, customers, and the larger community—has been dominant in the business world in the past thirty years. As the field of activist investing becomes increasingly crowded, many investors are going beyond their original mission of finding ailing or mismanaged companies and pushing them to improve. Instead, some have been targeting larger, financially prosperous companies, such as Procter & Gamble, Apple, and PepsiCo. ......Often, activists advocate for measures that drive up the stock price but can have negative effects in the future, such as the outsourcing of jobs, the elimination of research and development, and the borrowing of money to buy back a company’s own stock. The wisdom of these tactics has come under increasing scrutiny. Some of the most successful businesses to emerge in recent decades have staved off short-term pressures, forcing their investors to be patient with uncertainty and experimentation. The founder of Amazon, Jeff Bezos, wrote in an early investor letter that building something new “requires you to experiment patiently, accept failures, plant seeds, protect saplings.” ........Over time, this lack of long-term vision alters the economy—with profound political implications. Businesses are the engine of a country’s employment and wealth creation; when they cater only to stockholders, expenditures on employees’ behalf, whether for raises, job training, or new facilities, come to be seen as a poor use of funds. Eventually, this can result in fewer secure jobs, widening inequality, and political polarization. ..........Bush spoke about his last day in the office, when he had sobbed during his final address to Athena’s employees. He had also written a farewell letter. “I believe that working for something larger than yourself is the greatest thing a human can do. A family, a cause, a company, a country—these things give shape and purpose to an otherwise mechanical and brief human existence,” the letter read. “The downside about things that are larger than ourselves, of course, is that we who have the privilege of serving them ourselves are fungible. It is the fundamental definition. You can’t have the grace of the one without the other......Throughout our conversations, Bush returned to a theme that consumed him. He talked about how investors like Singer—financiers who take the assets built by others and manipulate them like puzzle pieces to make money for themselves—are affecting the country on a grand scale. A healthy country, he said, needs economic biodiversity, with companies of different sizes chasing innovation, or embarking on long, hard projects, without being punished. The disproportionate power of the Wall Street investor class, Bush felt, dampened all that, and gradually made the economy, and most of the people in it, more fragile.
distressed_debt  Elliott_Management  financiers  hard_goals  hard_work  hedge_funds  investors  long-term  patience  Paul_Singer  profile  shareholder_activism  Sheelah_Kolhatkar  time_horizons  vulture_investing  Wall_Street 
august 2018 by jerryking
U.S. junk-bond specialists behind Postmedia’s Project Canada - The Globe and Mail
JACQUIE MCNISH AND JACQUELINE NELSON
The Globe and Mail (includes correction)
Published Tuesday, Oct. 07 2014
Postmedia  investors  hedge_funds  distressed_debt  Paul_Godfrey  digital_media 
october 2014 by jerryking
Newton Glassman, a private man in the stressful world of private equity - The Globe and Mail
Dec. 06 2013 | The Globe and Mail| BOYD ERMAN.

Newton Glassman has spent the past 11 years running hard to build what has become Canada’s second-largest private equity firm....Mr. Glassman’s firm, Catalyst Capital Group Inc., now runs $4-billion of assets that it mostly puts to work in messy distressed situations, trying to take control of struggling companies and turn them around....Investing in distressed debt is a gritty, confrontational business. Mr. Glassman's firm typically buys bonds issued by a troubled company, spending countless hours searching for the securities that will provide the most influence, then tries to gain control when the company is restructured. The goal is to buy in cheap, seize power if necessary, fix the business and reap the rewards. It can be a rough job, because there is rarely enough money to go around and someone usually loses out.

When he was at Cerberus, founder Steve Feinberg warned him about the personal cost of building a firm, telling him: “There is a massive difference between being one of the key players and being THE guy in charge.”

Catalyst’s charitable arm also is building a knowledge centre that will work with universities to provide investors, lawyers and judges with more education about credit markets. Mr. Glassman has harsh words for the way credit markets sometimes work in Canada, as judges have sometimes upset the traditional order of restructurings...

Mr. Glassman says that at the time, he thought Mr. Feinberg was “just yakking.” But if he knew then what he knows now about building his own firm, he says he probably would have stayed at Cerberus. “The job of being the guy is if you take your responsibilities seriously, it is all encompassing.”
private_equity  Newton_Glassman  Bay_Street  Boyd_Erman  Catalyst  personal_cost  distressed_debt  turnarounds  Cerberus  vulture_investing  restructurings 
december 2013 by jerryking
Vulture Funds Serve Purpose
Dec 20, 2006 | National Post | Marie Beaudette.

Harbinger said Crescent declared "thermonuclear war” by resisting the hedge fund's advances. But the rule of

mutually assured destruction doesn't apply in bankruptcy: Crescent eventually conceded to a hedge fund determined to win.
Regulators are starting to question the role hedge funds play in Chapter 11 cases. The Securities and Exchange Commission has expressed concern about whether hedge funds have lied to gain leverage in bankruptcy cases and traded on sensitive information gained through the process.
New York University Professor Edward Altman estimates there are at least 160 investment funds in the US. specializing in distressed-company securities. "A new breed of distressed-debt investors, called ‘vulture funds,‘ has emerged as one of the fastest- growing sectors of the burgeoning hedge fund and private equity field," Mr. Altman wrote in a recent study.
vulture_investing  bankruptcies  distressed_debt  restructurings  SEC 
september 2012 by jerryking
Opportunities in Distressed Securities
March 28, 1995 | Finance Weekly | by Martin Sass, CEO of M.D. Sass Investors Services, a New York Cky—based investment management firm.

Some of the best investment opportunities lie in post-bankruptcy investing....Five factors contribute to success in distressed-security investing: high absolute return potential; astute, rigorous financial analysis: expertise in the bankruptcy and restructuring process; investment flexibility (i.e.. the ability to invest both long and short, as well as anywhere in the capital structure ranging from senior debt to subordinated debt to equity): and portfolio diversification....Another important task is making an informed estimate of the time it will take to realize the forecasted value and any likely intervening events (i.e., litigation, negotiations and other elements of the restructuring process) that will affect that value and/or the duration of the workout. A workout of a distressed
situation could take anywhere from six months to five or more years. This makes a difference when figuring your annualized return.
distressed_debt  capital_structure  howto  workouts  bankruptcies  investors  opportunities  restructurings 
july 2012 by jerryking
Adequate Due Diligence: Are You Sure?
Fall 2002 | Journal of Private Equity | by Michael J. Hausman.

Review of:
(a) Prior acquisitions and/or acquisition strategies;
(b) Profitability by product line;
(c) Historical and projected financial results;
(d) current status of the industry (or industries) in which the company operates;
(e) existing customer relationships.
automotive_industry  due_diligence  distressed_debt  restructurings 
april 2012 by jerryking
Considerations for Investors Before Investing in Bankrupt Companies
Fall 2002 | The Journal of Private Equity | by Warren H. Feder and Patrick LaGrange
bankruptcies  distressed_debt  howto  private_equity  hedge_funds  investors 
march 2012 by jerryking
Distressed companies provide valuable lessons in economic downturns - The Globe and Mail
May 3, 2010 10:29 | Globe & Mail | Harvey Schachter .
Distressed companies provide valuable lessons in economic downturns.

SPEED RATHER THAN PERFECTION;

CASH IS KING;

FOCUS ON HIGH–IMPACT ISSUES;

MAKE THE TOUGH PEOPLE CALLS (JCK i.e. get the right people in place);

UNFREEZE THE ORGANIZATION: In a distressed organization, decisions that usually take months to make can be taken in hours or days. Those rapid decisions, they argue, are at least as good as the slow, agonized decisions of the past - so unfreeze your organization with quicker decisions, and a willingness to shake up your systems to improve performance.

Avoid doing the following: CUT FAT, NOT MUSCLE; FOCUS ON MORE THAN SURVIVAL:
cash_reserves  cost-cutting  distressed_debt  economic_downturn  Harvey_Schachter  high-impact  Jeffrey_Gitomer  immobilize  lessons_learned  paralyze  recessions  speed  the_right_people  turnarounds  under-performing 
may 2010 by jerryking
Related Group Expects Banks to Take Over Miami Condo Project Icon Brickell - WSJ.com
DECEMBER 17, 2009 | Wall Street Journal | by JAMES R. HAGERTY. Related Group Expects Banks to Take Over Miami Condo Project.
luxury  real_estate  distressed_debt  hotels  Siren  condominiums 
april 2010 by jerryking
The art of bringing order - and healthy returns - out of chaos
Mar 19, 2007 | Financial Times pg. 5 | PETER SMITH.Nothing attracts the interest of private equity more than a distress signal
private_equity  distressed_debt  vulture_investing  signals 
june 2009 by jerryking
InfoViewer: Distressed investors worry over strategy
23-May-2007 Financial Times article by Saskia Scholtes in New York.
restructurings  distressed_debt  investors 
february 2009 by jerryking

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