We invest in securities of companies that may be stressed or undergoing operational, financial, or other challenges, and in securities trading at a discount to intrinsic value.
We have the ability to invest across the entire capital structure, make loans to — and equity or equity-like investments in — stressed companies, fund recapitalization, provide debtor-in-possession loans and exit financings, and invest in securities in order to fund both in-court and out-of-court restructuring plans.
- Middle market focus - typically no more than $1.5 billion in revenue/capital structure
- Seek the optimal place in the capital structure on a risk/reward basis to protect investment in case of a potential restructuring
- Purchase at discounts to face value and intrinsic value
- Companies with long-term positive free cash flow, generally "asset-light", and defensible industry positions
- Securities with attractive yield to maturity and current yield
- Hybrid non-control and control strategy with ability to convert a debt investment into, or separately acquire, a meaningful equity position
- Duration provides ability to hold concentrated, illiquid positions
Stressed & Distressed Opportunities
- Over-levered, while operating profitably
- Sector or market dislocations
- Chapter 11 or out-of-court restructuring or sale
- DIP or rescue financing required
- Negotiated transactions for businesses with debt / equity needs