Friday, 27 March 2015
Last updated 3 hours ago
Mar 26 2012 | 1:53pm ET
New research estimates the current market for distressed assets at €1.5 trillion to €2.5 trillion, to be liquidated or sold in the next few years.
James Gereghty, managing director and head of distressed investing at the UK fund manager Siguler Guff & Company, says his organization estimates approximately €15 billion has been raised by dedicated funds keen to buy in on the opportunities with an additional €15 billion targeted to be raised by other fund managers.
In a report compiled by the International Monetary Fund, the distressed debt manager Alcentra and Lloyds TSB pension fund, IMF Assistant Director Luc Everaert says his group is “concerned more than ever [for the Eurozone], as policymakers struggle with the very fundamental issue of what constitutes a viable monetary union.”
Damien Miller, portfolio manager with the distressed debt manager Alcentra, believes European banks will be slow to sever their lending ties with many of their corporate loans:
“Banks have historically been extremely loath to make the requisite changes required, so they can deliver their balance sheets.”
Gereghty adds that with central banks heightening their activity to stem the corporate default rate, “…these dynamics have increased market uncertainty and contributed to distressed pricing of assets. Therefore, we also believe that the opportunity will likely be episodic by nature, meaning the opportunity will exist for a moment in time due to unforeseen systemic or structural impediments to ‘business as usual.’”
The report also questions whether the opportunity represented by distressed debt is being underestimated—viewed as too complex by many pensions and endowments. Says Mark Hoeing, managing director with the endowment fund manager Commonfund Capital: “The challenge is finding enough micro situations where you feel there’s a repeatable pattern of value investing and value enhancement.”
Stuart Stephen, group pensions director with Lloyds TSB, a leading UK commercial bank, believes “[pension] trustees need to be convinced about the position of distressed debt within their asset allocation. It is not an obvious ‘shoe-in’ at the moment.” Stephen does believe however that, “it needs to be further addressed in the future.”
Mar 9 2015 | 6:35am ET
As more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…