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10 Years Experience Needed to Apply

Katherine Doherty, Bloomberg News

 

(Bloomberg) -- Workout experience is becoming a hot commodity as distressed investors await the next recession, according to participants at a breakfast hosted by the Turnaround Management Association on Thursday.

 

* Given that the U.S. hasn’t gone this long without a recession in recent history, coupled with a significant expansion in private capital, there are many lenders, bankers and corporate borrowers without an economic downturn under their belts, said panelist Justine Mannering, managing director in consumer and retail investment banking at Stifel Financial Corp.

 

*Jeff Manning, managing director at CohnReznick Capital Markets Securities LLC said he’s getting inquiries from companies with lenders who don’t have enough experience to “go through the bumps in the road.” He advises them to find bankers who have the insight from having worked through several business cycles.
 

* Many lenders are currently in the market scrambling to find workout professionals to support their portfolio given where the U.S is in the economic cycle, Carey Davidson, head of capital markets at Monroe Capital LLC added. Firms with long investment
track records and a strong, established portfolio team can use this as a discounted buying opportunity to take advantage of those investors that “just want out,” she said.

 

* For those who have been patient enough to stick around, panelists pointed to distressed companies in retail and healthcare.
 

** The decline in retail has been so deep that there is widespread collateral damage, Manning said. “If retailers have a tough time, then landlords have a tough time, which means REITs have a tough time,” he said.
 

** Health care faces its own challenges with ongoing legal disputes and changes to reimbursement rates. “It’s hard to invest or lend to businesses where you don’t know the future revenue model,” Davidson said.
 

To contact the reporter on this story: Katherine Doherty in New York at kdoherty23@bloomberg.net
To contact the editor responsible for this story: Rick Green at rgreen18@bloomberg.net