The Art of Distressed Debt and Special Situations

Описание: 'You need to be half lawyer, half financial analyst and half management consultant to be a distressed debt guy"
I’ve been trying to discuss special situations and distressed debt, one of the least hyped but most interesting areas of finance and credit for a while.
So I jumped on this rare opportunity to interview Dan Bird’s team who’s been holding senior roles in that space for over two decades. We explore the complexity of these markets and the skillsets needed to navigate them and the broader private credit.

QUOTES
Versatility:
 You have to look at the company, and what it’s doing and determine a value. And sometimes that’s specific assets and sometimes that’s a stream of cash flows. Sometimes that’s intellectual property. And then you need to be a management consultant. Is this business capable of turning itself around? Are industry forces too far against this company that it’ll never recover?

Patience:
When something in the industry changes. People are reluctant to acknowledge it. People don’t like change. Everyone thinks things revert to the mean. A lot of people involved in the situation tend to have bias just because they’ve been involved in the situation. They tend to overvalue the ability for companies to recover.
That’s the most dangerous time to invest when we don’t really know.
Part of doing this job the right way is finding the right entry point the right timing. It’s very infrequently early.Patience does matter in terms of getting into these things. A lot of times that doesn’t happen until very long after things start to change.

On Private Credit:
There’s worry about some of the assets that were originated in that period. We’ll have a little bit more stress. It’s possible. It’ll take a little while to figure that out. From my perspective, that just creates different opportunities.

About Dan Bird:As the founder of Thornwood Hill LLP, I specialize in credit and alternatives asset management. With over 25 years of experience in the financial industry, I have a proven track record of managing diverse portfolios across the credit spectrum, from direct lending, to special opportunities and distressed debt to liquid credit. My expertise lies in identifying and executing strategic investment opportunities, ensuring optimal risk management, and delivering strong returns for clients. I am passionate about creating value through innovative and tailored solutions that meet the unique needs of each investor.

LinkedIn:   / daniel-bird-18456a42  

About the Show: Investology is a podcast dedicated to rethinking investment management and uncovering new ways to deliver better outcomes for investors.Listen on every podcast platform, or watch on YouTube.

An episode produced by Orama: https://orama.tv/
Sales-driven video strategies. Accelerate sales to the financial industry with content that builds trust and drives pipeline.

About the Host:
George Aliferis, CAIA is the founder of Orama, where he has produced content for many financial brands and multinationals like Amazon, Expedia, Louis Vuitton, and Unilever. Before that, he spent over a decade structuring, marketing and selling complex financial products to institutional clients in Europe and Asia.

TIMESTAMPS
00:00 Introduction to Private Credit
00:19 Evolution and Growth of Private Credit
01:59 Understanding Direct Lending and Market Trends
03:34 Performance and Volatility in Private Credit
07:41 Special Situations and Distressed Debt
19:10 Market Changes and Opportunities
19:20 Telecom and Movie Theater Industries
20:23 Investing in Distressed Debt
23:37 Restructuring and Capital Structures
29:01 Patience and Timing in Investments
32:58 Retail Investors and Private Credit