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Smaller Firms Good Fit for Distressed Investment

Established in 1995, Connecticut-based Contrarian Capital Management, LLC, focuses on distressed investment financings and management of such assets. Barron’s recognized two of Contrarian Capital’s hedge funds as among the top performers in the United States. 

Large investment firms continue to experience the limitations imposed by new state and federal banking regulations. Moreover, the current credit crunch creates increased pressure for large firms to generate revenue for shareholders. In this environment, many distressed asset financings today involve smaller firms with more flexibility to wait for such companies to begin to perform favorably or attract new buyers.

Small firms often hold the upper hand in acquiring distressed assets and managing them successfully because they can develop strategies based on long-term goals rather than structured benchmarks. In some cases, larger firms sell assets before they reach their optimal value because the assets have exceeded their risk appetite. A smaller firm that specializes in distressed investing often provides cash, management, and other oversight to help a company emerge from financial volatility. Most large firms focus on increasing wealth in the markets rather than in the board room, but a smaller firm will build wealth with a cohesive, overall approach to stabilizing businesses.

Economic Benefits of Distressed Investing in Europe

With headquarters in Greenwich, Connecticut, and international offices in Paris, Hong Kong, and São Paulo, Brazil, Contrarian Capital Management, LLC, offers expert financial structuring strategies that enable distressed businesses to realize their full potential for profits and market penetration. In addition, Contrarian Capital provides effective management of portfolios comprised of distressed property assets.

Many companies possess a product that meets the needs and demands of its target audience and fills a niche that was previously empty. Yet despite their excellent market potential, these organizations sometimes fail because of inadequate funding or inexperienced management. Investments in distressed companies provide significant opportunities to maintain the economic viability of these companies and carry them to profitability. Successful investments in the sector require significant knowledge and a cohesive financing plan, but many investors have seen their transactions yield favorable returns.

Companies in Western Europe, which continues to undergo economic change as a result of currency and political pressures, attract investors because of the highly advanced technology, business, banking, and transportation resources available in those countries. Moreover, the European Union supports programs that simplify the processes and rules for investments in companies that are struggling financially. As a result, the climate for investment in distressed business remains extremely positive for a growing number of investors from the United States and Asia who choose to focus on this influential and important market.