Category Archives: private equity

Holidays 2009: Distressed Asset Investment Letter

Dear Friends:

With year-end traditionally being a time to slow down and reflect, this post is intended to be a review of the past year, and a prognosis of sorts for what the transactional deal marketplace may show us in 2010.

However, slowing down and reflecting on this year only gives me that post-roller coaster sickness feeling. This was one of the most challenging years in business for most of us. Although it ended up being a positive year from a business standpoint, it required a wholesale reinvention of what we do, as most of our business models were affected by many polar opposite, sometimes unintended and varied influences that converged in a dizzying array of confusion. It was humorous to read that many prognosticators declared that the end of the recession was near, or even that the recession was behind us, because, contrary to the statistical reports showing declines in unemployment figures and upticks in consumer confidence, in reality the fundamental problems that grounded the economy in 2007 are not significantly different from those prevalent now. Other than runaway bank profits and the gilded age of Wall Street bonuses, our world is now as it has been for the past 2 years. We have made forward progress, but what the economic landscape has in store for us in 2010 will prove to be a mixing pot of small explosions that together will concoct a distressed asset stew full of nutritional values that we may only be able to sample if we have the coupons. Well, friends, we are the manufacturer of those coupons.

Let me try and catch you up on all that has happened in this busy year! Continue reading

Setting up a Distressed Asset Investment Fund

I have been approached many times to explain how a Distressed Asset Investment Fund is set up.  Clearly, you need legal advice and consultation every step of the way in this process, and the laws, disclosure requirements, and particulars of each Fund will be different, but in general, below is a Legal Guide that I published on the website http://www.avvo.com, which is a site that gives consumers guidance, background information, including ratings in their selection of an attorney.  While this Legal Guide is meant to be educational and informative, it is posted for informational purposes only and discusses general legal principles, trends, and considerations; it is not intended as specific legal advice .  This post does not establish an attorney client relationship.  For legal advice, you should retain legal counsel in your state for advice regarding your specific circumstances:

That being said . . . Assets have become distressed due to above-average vacancy rates, inability to refinance existing debt, depletion of reserves, and disrepair. While these assets are now more affordable, the capital funding needed to acquire, rehabilitate and reposition these assets is more difficult to obtain.  The following are the basic steps and principles involved in the set-up of a Distressed Asset Investment Fund. Continue reading