Distressed PE/HF

So this actually hasn't been brought up in a while, but Im trying to compile a list of respectable distressed players. Preferably control PE funds, but anymore the HF/PE line can be blurred when it comes go distressed companies and their debt.

Other than the obvious Oaktree, Apollo, Ares, and Cerberus who else is out there? There are so many funds out there its hard to keep track. I know there is Catalyst in Toronto and KPS. There is also Angelo Gordon and WL Ross/Invesco. Then the big credit arms like TPG, GSO, etc.

Not really trying to make a "ranking" just trying to put together a list of respectable players in the space.

Region

Comments (113)

 
Jan 13, 2015 - 1:32pm

In addition to what you've mentioned: Avenue, Black Diamond, Fortress, GoldenTree, Mount Kellet, MHR, Centerbridge, American Securities (opportunity fund), Sankaty, KKR (special situations), OHA, Castlelake, Wayzata...

Off the top of my head. A good number of players out there.

 
Jan 13, 2015 - 2:16pm

This has been covered multiple times... use the search function.

Play the long game - give back, help out, mentor - just don't ever forget where you came from. #Bootstrapped
 
Jan 13, 2015 - 4:14pm

EightAceTres:

This has been covered multiple times... use the search function.

Pretty sure we covered this a month back. I'll add VPC, KPS, Sun Capital (not exclusively DD/SS IIRC), Platinum Equity (also not exclusively DD/SS) to Hugh Myron's list. There are another 3-4 Cargill spinoffs outside of WIP and Castlelake.

 
Jan 13, 2015 - 4:32pm

Bullet-Tooth Tony:

EightAceTres:

This has been covered multiple times... use the search function.

Pretty sure we covered this a month back. I'll add VPC, KPS, Sun Capital (not exclusively DD/SS IIRC), Platinum Equity (also not exclusively DD/SS) to Hugh Myron's list. There are another 3-4 Cargill spinoffs outside of WIP and Castlelake.


Okay then i missed it when i was searching. I found one from A WHILE ago
 
Jan 13, 2015 - 5:04pm

Bullet-Tooth Tony:

EightAceTres:

This has been covered multiple times... use the search function.

Pretty sure we covered this a month back. I'll add VPC, KPS, Sun Capital (not exclusively DD/SS IIRC), Platinum Equity (also not exclusively DD/SS) to Hugh Myron's list. There are another 3-4 Cargill spinoffs outside of WIP and Castlelake.

I feel like WSO should just sticky lists of PE, HF, IB, etc... firms by location and specialty (where relevant) that are constantly updated from user suggestions.

 
Best Response
Jan 13, 2015 - 4:31pm

I'll just leave this here....

http://www.wallstreetoasis.com/forums/distressed-debt-oaktree-capital-management-and%E2%80%A6

Play the long game - give back, help out, mentor - just don't ever forget where you came from. #Bootstrapped
 
Jan 13, 2015 - 5:06pm

Sounds like the Company database.

Play the long game - give back, help out, mentor - just don't ever forget where you came from. #Bootstrapped
 
Jan 13, 2015 - 5:26pm

Let me rephrase what I am trying to accomplish here. That is just a list of funds. Im trying to find more funds like Catalyst and KPS who have crushed it and are growing. Catalyst hasnt lost money on an investment in 10 years and KPS has top quartile IRRs and gets 30% carry.

I could make a list with old threads but that doesnt give me a qualitative factor or screener. Im trying to make a list of funds that perform well, have a solid team, and have a good reputation in the distressed space.

Pointing me to a thread of listing firms with the loan-to-own strategy is as useful as a CapIQ screen

 
Jan 16, 2015 - 7:36pm

gh15:

good luck working for a fund like Catalyst - expect to get brutalized.


Also interviewed there and bowed out of the process halfway through.

An ex employee analogized working there to "getting assraped everyday"

Array
 
Jan 14, 2015 - 12:47am

I'll bite. It depends on your size/focus, but Z Capital, ComVest, and Grey Mountain are some strong distressed PE funds that will acquire Company's in distressed situations, but they are closer to Middle Market than some of the names above. Other funds that come to mind include SilverPoint, Blue Wolf, Aterian, Littlejohn, Monomoy, Levine Leichtman, Aurora Resurgence, Tennenbaum.

I'm PE focused, and out of the above I would think Littlejohn would be the best thought of by the industry, but I could be wrong.

For research purposes in case you're looking for more names...
http://www.distressed-debt-investing.com/2010/12/updated-list-of-distressed-debt-hedge.html

Play the long game - give back, help out, mentor - just don't ever forget where you came from. #Bootstrapped
 
Jan 14, 2015 - 1:23am

EightAceTres:

I'll bite. It depends on your size/focus, but Z Capital, ComVest, and Grey Mountain are some strong distressed PE funds that will acquire Company's in distressed situations, but they are closer to Middle Market than some of the names above. Other funds that come to mind include SilverPoint, Blue Wolf, Aterian, Littlejohn, Monomoy, Levine Leichtman, Aurora Resurgence, Tennenbaum.

I'm PE focused, and out of the above I would think Littlejohn would be the best thought of by the industry, but I could be wrong.

For research purposes in case you're looking for more names...

http://www.distressed-debt-investing.com/2010/12/u...


Awesome. Thank you. +1
 
Jan 14, 2015 - 10:47am

EightAceTres:

I'll bite. It depends on your size/focus, but Z Capital, ComVest, and Grey Mountain are some strong distressed PE funds that will acquire Company's in distressed situations, but they are closer to Middle Market than some of the names above. Other funds that come to mind include SilverPoint, Blue Wolf, Aterian, Littlejohn, Monomoy, Levine Leichtman, Aurora Resurgence, Tennenbaum.

I'm PE focused, and out of the above I would think Littlejohn would be the best thought of by the industry, but I could be wrong.

For research purposes in case you're looking for more names...

http://www.distressed-debt-investing.com/2010/12/u...

This is why the question is tough to answer. Grey Mountain also buys performing assets, just like several other groups mentioned in this thread.

I think there is a good list @"DaBBzMan" in this thread. All of them are solid, reputable shops. Some are going to be more vulture-like than others, there are differing strategies, etc., but any of them will give you good great experience.

 
Jan 14, 2015 - 10:50am

Bullet-Tooth Tony:

EightAceTres:

I'll bite. It depends on your size/focus, but Z Capital, ComVest, and Grey Mountain are some strong distressed PE funds that will acquire Company's in distressed situations, but they are closer to Middle Market than some of the names above. Other funds that come to mind include SilverPoint, Blue Wolf, Aterian, Littlejohn, Monomoy, Levine Leichtman, Aurora Resurgence, Tennenbaum.

I'm PE focused, and out of the above I would think Littlejohn would be the best thought of by the industry, but I could be wrong.

For research purposes in case you're looking for more names...

http://www.distressed-debt-investing.com/2010/12/u...

This is why the question is tough to answer. Grey Mountain also buys performing assets, just like several other groups mentioned in this thread.

I think there is a good list @DaBBzMan in this thread. All of them are solid, reputable shops. Some are going to be more vulture-like than others, there are differing strategies, etc., but any of them will give you good great experience.

Thanks. Do you have any first hand experience eith any or any insight you are willing to share relating to the funds mentioned?

 
Jan 14, 2015 - 11:05am

@eightacetres @Bullet-Tooth Tony I think Im more interested in the PE model for distressed control investing, but want to do some reading into the Distressed Debt HF model.

If I were to break it out into 2 lists and say "I want to do vulture oriented PE that really focuses on buying broken businesses and putting the pieces back together or building something new" OR "I want to get into a distressed debt HF that focuses on claims in or going into bankruptcy"

 
Jan 14, 2015 - 11:13am

SVP are worth a mention

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 
Jan 16, 2015 - 7:29pm

There are many more if you look at attendees for industry events.

Global buyer of highly distressed industrial companies. Pays Finder Fees Criteria = $50 - $500M revenues. Highly distressed industrial. Limited Reps and Warranties. Can close in 1-2 weeks.
 
Feb 1, 2015 - 4:59pm

Are there any distressed funds that have a flexible mandate and afford the opportunity to really play on the line between HF/PE and invest in distressed securities and also traditional buyouts? I read a post by @"APAE" from a couple years ago that mentioned Centerbridge as being like this, but not sure if its still true or if there are others?

 
Feb 8, 2015 - 7:56am

the distressed debt investing website has a comprehensive list of DD firms, although the list hasnt been updated in a while I dont think.

I can't post the link because I'm new...but just google it

Try to isolate what matters to you: size, performance, culture, types of distressed assets (corporate, RE, NPLs) etc

 
Jan 12, 2017 - 6:23pm

Very interesting. I always thought PE shops raised separate funds for each, and had associates concentrating on one fund. I am glad to hear that is not the case. However, going through the list of funds in the other two threads as well as the ones named, all seem to be megafund names. Do you think there are plenty of mm funds that also work on both?

 
Jan 12, 2017 - 6:24pm

That's a great question and unfortunately one that I cannot answer, but I would imagine that there have to be several middle market funds that do both distressed and traditional buyouts. I'm with you though, it's tough given that all the funds listed as doing both distressed and traditional buyouts are megafunds/extremely competitive to land positions.

"You rarely have time for everything you want in this life, so you need to make choices. And hopefully your choices can come from a deep sense of who you are." - Mister Rogers
 
Jan 12, 2017 - 6:25pm

Depends how you define MM, but yes. Groups like Platinum Equity do buyouts and distressed. It's last fund was $3.75B, but it acquires businesses in the $100mm to $1B range. It may go larger or smaller, depending on the circumstance.

There are several prominent MM shops that do both, however if they have an inkling for distressed and special situations deals, they are likely going to be value buyers when it comes to traditional buyouts. Meaning, they are going to buy flat or underperforming companies, divisions, assets. You generally do not see them acquiring names where growth is still prevalent because their approach.

There are dozens of names. Examples would be Sun Capital, American Industrial Partners, Rosewood, Pritzker Group, etc.

In general, MM PE mandates tend to be more flexible than you might expect. Family offices like the Pritzkers are even more flexible because they have no LPs.

 
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Jan 12, 2017 - 6:28pm

Distressed Investment Fund Rankings (Originally Posted: 08/06/2008)

If you were to rank the top HF, PE, and Vulture shops that deal actively in distressed debt, what would that list look like?

Candidates include...

Harbinger, Siguler Guff and Company, Matlin Patterson, Aetos Capital, Apollo, Ares, Audax, Carlyle, CMS, Goldman, Blackstone, Gramercy Global, Highland, Japonica, Lehman Distressed Ops Fund, Morgan Stanley Global Distressed Ops Fund, Quadrangle, Wayland, WL Ross, Sankaty Advisors, Cerberus, Oaktree, Avenue, Golden Tree, Siver Point, Plainfield, Satellite, Anchorage, Tudor, Moore, OZM, GLG, Eton Park, TPG-Axon, Viking....

 
Jan 12, 2017 - 6:33pm

[quote=slkyswtbllr05]Citi's closing Tribeca Fund (http://www.bloomberg.com/apps/news?pid=20601087&sid=aK2Kay5ACF_8&refer=…]

That sucks...
I was hoping I could leverage my ops position here at SunTrust securities to a nice FO at Tribeca too...

But whatever... there are 4 more on that list and as long as none of them are accused of fraud or almost taking down the financial system than I'm happy.

 
Jan 12, 2017 - 6:41pm

nauru:
Perhaps you should google them; at least a couple of those have indeed been accused of almost taking down the financial system.

http://en.wikipedia.org/wiki/Long-Term_Capital_Management

That sucks Nauru... I was hoping I could sit around a circle on the LTCM trade floor and play Liar's Poker against John Meriwether...

No matter tho... I should be able to leverage my summer as a gas attendant at BP to the Natural Gas desk of Amaranth Advisors. Heard big things about that Brian Hunter guy

 
Jan 12, 2017 - 6:49pm

Distressed Debt Firms (Originally Posted: 03/05/2014)

If someone is interested in a career in distressed debt. What would be the best major to pursue? Would you suggest forensic accounting? Would you say this is an area of finance that accounting majors have an advantage over the finance majors?

-Roulette

 
Jan 12, 2017 - 6:51pm

Finance and accounting would both be helpful. I wouldn't say an accounting major would have an advantage over a finance major. You might have a deeper understanding of things like pensions and OPEB, but in general you really need both. I'm in a restructuring / distressed debt class right now and learning about bankruptcy law, credit agreements, indentures, credit markets, leveraged finance, negotiation strategies, etc. You should probably learn about investing (esp. shorting equities and longing distressed bonds/loans) and identifying distressed companies.

 
Jan 12, 2017 - 6:54pm

Best value and/or distressed funds? (Originally Posted: 11/23/2007)

Hey, I know Lone Pine and Greenlight are top funds in the value space, and I'm also interested in distressed investing, or funds that do both (maybe these funds do both?). What other funds in these areas are considered very good?

Thanks!

 
Jan 12, 2017 - 6:57pm

Doesn't ESL Investments only have like 8 guys in the whole shop?

Cerebrus and Appaloosa probably belong on that list.

Do Third Point and Pirate Capital count given that they're more activist shops?

-------- Right now this is a job. If I advance any higher in this company, then this would be my career. And um... Well, if this were my career, I'd have to throw myself in front of a train.

 
Jan 12, 2017 - 7:00pm

Well, Third Point seems to find places that are suffering due to mismanagement or "Chief Value Destroyers" it seems, so I think it might fit... It's a turnaround shop of a different sort.

-------- Right now this is a job. If I advance any higher in this company, then this would be my career. And um... Well, if this were my career, I'd have to throw myself in front of a train.

 
Jan 12, 2017 - 7:01pm

ESL has like 15 guys on staff including lampert and the President of the fund. Very small shop when I went there last year. apparently an amazing place to work though. if you really badly want to work there PM me and I'll hook you up with some shit.

Third Point is not distressed debt, it is distressed management, undervalued companies as well as event-driven. he is a more "rabble-rousing" version of eddie lampert.

whitney tilson's HF is also a value fund, highly concentrated long only.

 
Jan 12, 2017 - 7:03pm

Distressed Hedge Funds (Originally Posted: 02/25/2009)

I have some ideas about this topic, but thought it would be good to hear the group's thoughts about it. Searching the bios of distressed funds, one tends to find a few common backgrounds:

Standard IB
Restructuring IB
Law
HY research/trading

Many folks would love to land at a place like SilverPoint or Highland, but assuming they can't get an offer, which of the above options is best? Do folks in bank restructuring groups (HLHZ, Miller Buckfire) generally have an easy time joining a fund after a few years? Easier than someone in general IBD at, say, Lazard? How about HY research?

Interested in your thoughts. Thanks.

 
Jan 12, 2017 - 7:04pm

Great question. I'd like to know what kind of work the restruc guys get to do in boom years, if you typecast yourself as a vulture, is it hard to make it back to the healthy side?

As a former lawyer I'd say avoid law if you really want to work in finance. Law is word based and most lawyers are hopelessly illiterate when it comes to numbers. Most lawyers I know can't even read a 10-k properly.

 
Jan 12, 2017 - 7:12pm

To 90212 to 10171: Actually, I am looking for those PE who buy the underperforming companies, operate and turn it around, finally sell it several years later...... rather than those distressed securities investor, who just look for arbritrage opportunities and short-term profit from bankrupcy process. Any thoughts? Who is the best in this area? Cerberus, Apollo or others?

 
Jan 12, 2017 - 7:15pm

are a lot now, but the following guys are defintiley big players (they all went through the last cycle, have diversified into larger multistrat funds, raised distressed funds)...I'm probably leaving out a few

No particular order: Cerberus, Avenue, Goldentree, Quadrangle, Silver Point, Harbinger, Canyon, Fortress, Marathon, Highland, GSO, Oaktree, Plainfield, Satellite, GS distress, Anchorage, Mattlin Patterson, etc (the list goes on, probably another 10-15---every guy on this list has over 5bn, Harbinger over 25bn...yes, the HF industry is very large even in subsectors, prestige matter very little unlike investment banks, unless you are sitting on top of the empire)

The big macro funds (Tudor, Moore) and large multistrats (OZM, GLG) and even value/event funds (Eton Park, TPG-Axon, Viking) all have started practices also. Almost every major fund probably is looking or already has a sub-fund to concentrate on distress for the upcoming cycle.

All have good reputations and have bright people, you really want to find a place where the fit is good and you might have some upside 3-5 years down the road (don't base it on reputation from banking or in the WSJ, the industry itself works very differently in terms of pay/responsibility). You can also move around pretty easily after 2-3 years, very close knit community

 
Jan 12, 2017 - 7:19pm

people tend to fall into distressed funds from all backgrounds (know guys from M&A, traders, restructuring guys, leverage finance, long/short, PE). Also depends if you plan on focusing on the public or private side. The more private the deals in nature, the more banking oriented skillset needed (providing dips, rescue financing, restructurings, etc). If more public oriented, than deep value, public market experience definitely helps, and risk controls matter more. Obviously, there is huge crossover here also (you might buy distressed bonds in the public markets based on public information and end up restructing the company over a 2 year period with private information, etc). In general, distressed funds do tend to like people with more experience compared to long/short shops (due to the more technical/complex nature of bancruptcies, restructings, etc), but that has been changing as many of these shops have become so big.

At the end of the day, I think they look for very bright, inquisitive and hard working people (it is that generic). On the prestige front, ofcourse coming from a top bank (GS) helps, but there are plenty of people from the restructing boutiques at distressed funds.

 
Jan 12, 2017 - 7:21pm

CG & KKR? More like GSO (BX), Centerbridge, York, DK, SVP, Elliott, Avenue and a few others (that is if you are looking at distressed debt, now their principal business or high yield for example is a different set of peers). Most of these obviously also do not just do distressed debt but they have big allocations in the space

"too good to be true"

See my WSO Blog

 
Jan 12, 2017 - 7:24pm

GBB_19NHS:

CG & KKR? More like GSO (BX), Centerbridge, York, DK, SVP, Elliott, Avenue and a few others (that is if you are looking at distressed debt, now their principal business or high yield for example is a different set of peers). Most of these obviously also do not just do distressed debt but they have big allocations in the space

Is GSO considered distressed debt? I always thought that they were more mezzanine. Also Sankaty, TPG special situations, Apollo, Tennenbaum, Canyon, Monarch, MatlinPatterson?

 
Jan 12, 2017 - 7:25pm

Yeah GSO is in a good amount of distressed situations given its size. For sure Apollo, Canyon & Monarch are on most major situations as well and are pretty visible. TPG is building out their team here in Europe and Sankaty is around from time to time as well but they do less distressed/special situations from what I hear.

"too good to be true"

See my WSO Blog

 
Jan 12, 2017 - 7:26pm

GBB_19NHS:

Yeah GSO is in a good amount of distressed situations given its size. For sure Apollo, Canyon & Monarch are on most major situations as well and are pretty visible. TPG is building out their team here in Europe and Sankaty is around from time to time as well but they do less distressed/special situations from what I hear.

TPG raised multiple turnaround and SS funds in the $4-7B AUM range. Although distressed is not its core, it has long term experience.

Agree on Sankaty.

 
Jan 12, 2017 - 7:31pm
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