With fears of a potential recession looming, investors are seeking opportunities among distressed assets. One alternative asset manager, New York-based Balbec Capital, seems to be prepared no matter which way the markets turn.
“Financing/capital markets are experiencing headwinds as they see-saw between inflationary and recessionary concerns, but we’ve navigated these events before and see them as shorter-term roadblocks,” Peter Troisi, Balbec partner and head of investments, Americas, tells Mergers & Acquisitions. “We also have some assets that outperform in higher rate environments and expect to selectively monetize them to take advantage of new opportunities.”
Earlier this week, Balbec, which was formed in 2010, said it raised its fifth fund at over $1.5 billion, the firm’s largest to date. The fund will look to invest in in credit-sensitive financial assets such as residential, commercial and consumer loan portfolios, including assets subject to bankruptcy or other structured repayment plans, as well as alternative credit assets like residential mortgage servicing rights.
With home prices still at near all-time highs, and mortgage rates above 5 percent, some believe a real estate market crash will eventually happen.
But that does not seem to phase investors such as Balbec. “The good news is that our opportunity set exists in good and bad times,” Troisi mentions.
– Demitri Diakantonis
