Distressed Debt / Workout Groups of Traditional Asset Managers

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Does anyone have any insight into the work / culture / pay / etc of the distressed debt / workout groups that sit within the private credit businesses ran by New York Life / Allianz / PGIM / MetLife?

Are these types of guys more about just getting their principal back with a new credit instrument / cash from sale, or would they ever convert to equity or come up with another creative solution? Are these groups actively looking for distressed opportunities in the market, or are they waiting around for something to blow up in the portfolio before its handed off to them?

Do distressed-focused hedge funds recruit from these types of groups? I'd imagine these groups would be great spots to get a lot of direct restructuring experience.

Comments (4)

 
Sep 17, 2019 - 12:56am

Typically these types of firms are managing CLO or CLO-like assets (read: looking for a coupon) that preclude them from owning equity.

In my experience, they are more interested in letting a well known distressed investor in the structure run the steering committee (there are exceptions to the rule, Franklin also comes to mind as a more active participant though obviously not a pure insurance entity like you listed above).

 
Sep 17, 2019 - 8:31am

Good point on Franklin, they had slipped my mind although I have ran into them from time to time. Agree re: focusing on a new debt instrument in most cases.

The groups I'm looking at focus on distressed within their broader private placements business, so I'd imagine they would be the only creditor involved or at least one of a few which may result in more active restructuring involvement.

 
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Jul 6, 2020 - 2:42pm
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