Good Times Coming for Distressed-Asset Managers

15 November 2010

1 minute read

Good Times Coming for Distressed-Asset Managers

Bankers with experience in distressed assets, and a taste for riskier sectors, could have a host of opportunities in the next few years.

The need to manage and liquidate distressed portfolios is growing, and specialists will be in one of the most active sectors of the 2010s. For example, Peter Briger, co-chairman of Fortress Investment Group, recently told the New York Times that the next five years will see more asset liquidations than the past 100.

Recruiters expect hiring in the sector to follow a recent pattern, where independent asset managers raid Wall Street banks for talent. MatlinPatterson, a New York-based private equity fund that specializes in distressed assets, just poached a credit investment team from KeyCorp, led by Craig Ruch. Reportedly, the team will focus on corporate and municipal debt.

One recruiter expects a battle for talent between Wall Street firms and more opportunistic firms like hedge funds and asset managers. In many cases, the banks are sitting on piles of deteriorating assets, and need people to manage and liquidate their positions.

AUTHORChris O'Leary

Insider Comment

3 comments

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Cristina Wagner
22 November 2010
Banks are engaging lending officers to do work-out, so the ones causing the damage are now rewarded with steady work!!!. Not the original lending officers are holding onto the "bad" loans until market turns around just to keep their jobs. As one told me: Do not solve the problem and send the loan back to the origination officer otherwise you will be left out of work. I did not follow the suggestion and guess what??? I was let go and the lending officer is still there waiting for the market to go around. Constipation YES but a self inflicted one I would add add to the mix credit scores destroyed under their instructions no wonder we are not getting out from recession.
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Cristina Wagner
19 November 2010
.Banks are engaging lending officers to do work-out, so the ones causing the damage are now rewarded with steady work!!!. No surprise the lending officers are holding onto the "bad" loans until market turns around just to keep their jobs. That is their job: lend money... if they screw they can keep their jobs and pretend they are trying to solve the problem. As one told me: Do not solve the problem and send the loan back to the origination officer otherwise you will be left out of work. I did not follow the suggestion and guess what??? I was let go and the lending officer is still there waiting for the market to go around. Constipation YES but a self inflicted one I would add add to the mix credit scores destroyed under their instructions no wonder we are not getting out from recession.
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David Hunter
18 November 2010
It will be interesting to see if this is indeed the case! Many of us who have been managing distressed loans/assets for years, have watched lenders pull loan officers, underwriters and other bank executives into the work-out deals or dispositions process. In short, letting the same people who made the "bad" loans, manage the "bad" loans! All this has done has aggravated and prolong the issues, and in some cases, make them worse when nothing moves, or happens. Hopefully, lenders will let the people who specialize in this realm get in to the process of deciding what qualifies as a salvageable asset and quantify those that aren't! Meanwhile, nothing is moving... thus I have coined the phrase "The Great Constipation".
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