Do Distressed Investing Opportunities Still Exist?

Your next video will start in

Recommended Videos

  • Info

  • Comments


Feb. 20 (Bloomberg) -- Chris Pucillo, CEO & CIO at Solus Alternative Investment Management, discusses how to find opportunities in the distressed markets on Bloomberg Television’s “Market Makers.”

Criticizing hedge funds, you did outperform the market.


The key is to find opportunities that are -- that have more upside than downside.

You are taking some asymmetric risk.

You are achieving results, as opposed to just finding undervalued assets.

Do you feel like it is played out?

Are there opportunities left?

There are.

Some are in smaller cap companies.

Some of the larger distressed funds -- distress funds have created that.

Can you actually find liquidity?

A smaller sized company in high-yield, can you find enough?

You can.

Last year, and our top 10 performers, we had six that were equity, post bankruptcy equity.

To that were distressed and two that were liquidations.

You find opportunities.

What about liquidity?

If the market were to turn and you are in midsized companies, can you get out?

That makes me worry.

Everything sounded great in 2007. there are definitely lesser liquidity issues that we have learned lessons from.

We are avoiding those.

You do not have to get that small.

You like the shipping industry.

We do.


A lot of european banks are starting to sell.

We started getting involved middle of last year after looking at 50 or 60 different deals.

What we are finding on what we have seen recently are that the rates have started to come up.

They are very close to the bottom.

If you look at the supply curve -- ships that are coming online versus ships that are coming off line -- it is a favorable environment.

How do you get to see opportunities from european banks?

One would think if they are selling, they have kkr and blackstone sitting there with their arms wide open.

How do you move into this?

That was the theory for all of the guys who raised money.

The reality is that we are in their everyday.

They are calling us because we trade with them everyday.

On u.s., on europe, whatever the case may be.

We have developed nice relationships in the shipping area.

We are pretty much seeing the deals.

Some of them, we might be too small to participate in.

They won't much bigger chunks.

You have bigger guys that are taking the whole thing down.

We have turned down 10 times as many deals as we have done and we have found many great opportunities.

The media loves to say there is no business to be done.

Is that the case?

Force at same as it has always been?

Is it a little less -- it is a little less.

Pre-2008 and into 2009, it was a little more robust.

There are still billions of dollars a day that are being traded, i think it is just among lesser people.

You are looking at a specific asset class.

How concerned are you about fed action?

The last time i was here with you we talked about policy risk.

I think it still exists.

I am not as worried.

The fed has been pretty clear in their message.

They have stuck to it.

They have demonstrated that they're going to stick to it.

My concern is the lack of predictability.

We're pretty comfortable with the fed doing what they are saying they're going to do.

What does keep you up at night?

What keeps us up at night are the bigger, more global issues.

What is happening in other countries.

We had a little taste of potential contagion last month with south america.

That was a concern.

We thought it was overblown.

It seems to have petered out at this point.

Those are the bigger concerns.

How does that affect you?

When you thought the emerging markets were cracking, what did you do when you went into work?

For us, it is a question of really understanding, is it going to have a long-term effect or is it going to be short term?

In 1998, we had much more of a longer-term effect.

That was only 6-8 months.

You have to get your arms around whether or not it is going to be -- how drawnout it is going to be and what do you need to take action.

It has no impact on any of our investments.

Before we go, is there one trade you like best and one company?

Our favorite investment is mgm studios right now.

Making it a comeback.

"robocop" is the movie.

That's right.

He is the ceo of slous.

This text has been automatically generated. It may not be 100% accurate.


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change