Investing in distressed assets

Investing in distressed assets requires great skill and talent. I would even consider investing in distressed assets to be a profession by itself! Our finance tutor has an excellent article today on the risks and rewards of investing in distressed articles.

As our MBA finance students consider the various opportunities in the world of finance, I would encourage you to explore the opportunities in investing in distressed assets. There are many ways to tap into the distressed assets space. Some of them  include

  • Private equity firms that specialize in distressed assets;
  • Distressed assets departments in investment banks;
  • Directly investing in distressed assets;
  • Banking departments that lend to distressed asset investors, etc.

Investing in distressed assets can be very profitable. Often the reason for distress is very clear, personal/specific and temporary. When the distressed situation blows away, the distressed assets gains tremendous value!  This article on investing in distressed assets highlights the profitability of the method when successful.

However, investing in distressed assets also has a high degree of risk. This risk is usually due to misreading the reason for distress or for misplaced or incorrect future expectations. The article also highlights an example of William Ackman’s (Perishing Square Capital Management) experience in investing in Stuyvesant Town and Peter Cooper Village.

If you are interested in learning more about investing in distressed assets, please do call or email us. Our finance tutors will be happy to assist you in learning how to evaluate and model opportunities.