Negotiating Special Situations Financing
For those of you at special situations funds - let’s say you develop a certain view on a company, do you go to them directly to negotiate unique financing and how does the process work? Also, how often do banks bring you opportunities?
Apologies if I’m completely off on how the industry works.
I summered at a special sits fund (think Ares/Oaktree/Sixth Street) and from what I remember it was almost exclusively banks showing us opportunities to invest in
Out of curiosity, which banks showed you the coolest deals?
Raine, LionTree, MS and Citi from what I remember
Could you pm me?
Out of curiosity (since the term has been used with so many meanings I don't know what it means any more) what are we talking about? Founder liquidity? Mezz? Subdebt? Asset financing? Recaps? Covenant cures? Rescue financing? Last resort lender secured by receivables on a 20% advance rate with penny warrants on top translating into 90% equity ownership if there's even a wrong comma in the reps with a 2 hour diligence exercise? Genuinely curious, want to anchor my understanding of what constitutes special sits these days. Thanks!
Pretty much everything you said falls into special sets except for maybe founder liquidity cap injections – didn't see those during my summer. A lot of the deals I saw involved investing anywhere along the cap stack from 1st lien and sub debt (with warrants for x% of the business) to pref to more unconventional structures. Special sits tends to be heavily situation dependent (hence the name) and tailor made so you end up seeing all kinds of structures / deals to sort out capital constraint issues
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