What are special situations funds?

What are special situations funds?

Key Takeaways. A special situation is a one-time event that has an impact on a stock or other asset. Any number of events, positive or negative, can cause a stock’s price to pop or depress its price. There are special situation funds that seek to exploit such events.

What is distress funding?

Financial distress is a condition in which a company or individual cannot generate sufficient revenues or income, making it unable to meet or pay its financial obligations. This is generally due to high fixed costs, a large degree of illiquid assets, or revenues sensitive to economic downturns.

What are distressed firms?

Distressed companies are businesses that are in risk of, or already have defaulted on their debts. Creditors of a distressed company should know that, although a company may not be making payments on some, or all of its debt requirements, there still may be some value remaining on the instruments they hold.

What is distressed PE?

What is Distressed Private Equity? Definition: In distressed private equity, firms invest in troubled companies’ Debt or Equity to take control of the companies during bankruptcy or restructuring processes, turn the companies around, and eventually sell them or take them public.

What do special situations funds invest in?

Special situations funds are meant to be “benchmark agnostic”, meaning they can take concentrated bets away from the index and invest in medium, small and micro cap stocks if the manager thinks that’s where the best opportunity is.

What are the types of financial distress?

Individual Financial Distress

1. Lost or reduced income. Anyone can suffer a sudden drop in income at any time.
2. Unexpected expenses. Large unexpected expenses, such as high medical bills or an expensive car repair, are another common cause of financial difficulties.
3. Divorce.
4. Failure to adequately manage your finances.

What is a distressed credit fund?

Distressed credit restructuring / turnaround. Distressed credit funds also buy suffering target companies utilizing equity, sometimes purchasing them before an expected bankruptcy and other times during the bankruptcy process. The goal is to gain control of companies that are under par value and then restructure them.

What are financial distress costs?

Distress cost refers to the expense that a firm in financial distress faces beyond the cost of doing business, such as a higher cost of capital. Companies in distress tend to have a harder time meeting their financial obligations, which translates to a higher probability of default.

How do distressed funds work?

Distressed debt investing entails buying the bonds of firms that have already filed for bankruptcy or are likely to do so. Companies that have taken on too much debt are often prime targets. The aim is to become a creditor of the company by purchasing its bonds at a low price.

How do distressed debt funds work?

Distressed debt investing involves buying the debt of a troubled company. It can often be bought at a steep discount. This allows you to turn a profit if the company recovers. An investor who buys equity shares of a company instead of debt could make more money if the company does turn itself around.

Why alalb Asia debt and debt restructuring Forum 2021?

ALB Asia Debt and Debt Restructuring Forum 2021 will provide the audience with timely insights to address these challenges, and practical tips to adequately equip the firms and creditors on how to navigate during the arduous restructuring procedure. What’s next for private debt lenders and distressed buyers – opportunities in 2021?

What challenges do creditors face in the Asian market?

Creditors who seek opportunities in distressed situations will face challenges that are unique to Asian markets such as the unsophisticated legal infrastructure governing debt and dissolution, limited access to information on the debtor companies, restrictions on fund remittance, and other tax or fraud complications.

What will pacaso’s new funding round mean for mceasy?

The new funds will be used to expand the company’s footprint in Europe. Pacaso manages nearly $200m worth of real estate on its platform. McEasy has secured $1.5m in the seed funding round.

Are private equity firms capitalizing on cross-border M&A in Asia-Pacific?

Despite a notable decline in Asia-Pacific cross-border M&A overall, private equity (PE) firms have still been able to capitalize on investment opportunities through the region in sectors that have both thrived and withered during the pandemic.