CHALLENGING ASSETS: AN OPPORTUNITY FOR VALUE CREATION
There is a lack of turn-around expertise and capital available to deal with challenging debt and equity assets in Atlante’s focus region.
Capital requirements and new regulations restrict financial institutions from holding illiquid investments. This, coupled with lack of in-house expertise, creates incentive to dispose of non-performing loan portfolios. However, many institutions are “warehousing” these assets in bad banks rather than resolving them, leading to further value erosion.
Cyclical, commodity type industries at their cyclical bottoms often have debt and operations in need of restructuring.
Family-owned businesses need to professionalize, but they often lack capital, modern management skills, and technology.
Strategic investors, corporate investors, and family groups hold on their balance sheets emerging markets assets that are not being optimally managed and/or are looking to exit.
Multinationals and large corporate investors go through periodic in-house ”clean-ups”, which lead to disposal of non-core or non-performing assets and are sometimes faced with challenging situations requiring strategic solutions for exit.
Private equity funds have billions of dollars invested in unrealized assets on their books. Limited and General Partners are eager to find solutions for “end of life” fund portfolios. Underlying companies are often neglected in need of time and resources to fully realise valuation potential and exit.