Contrarian Capital: Business Cycle Indicators Help Forecast Investment Performance

A mid-sized, privately-owned, international financial firm focused on distressed securities, Contrarian Capital Management develops investment opportunities aimed at generating robust income potential. The team at Contrarian Capital possesses significant expertise in the identification of market indicators.

Defined as periodic fluctuations in economic activity driven by corporate revenues and other variables, business cycle indicators help predict economic upswings and downturns. The business cycle broadly encompasses such events as contractions, which represent a slowing of economic momentum, and expansions, during which economic activity escalates, and the economy reaches its highest levels of activity.

The causes of business cycles prove elusive to most analysts because so many factors contribute to fluctuations. Gross national product, gross domestic product, government policies, and credit markets all play an important role in business cycles. Consumer confidence, appetite for spending versus saving, availability of raw goods, and inflation also influence the duration and intensity of boom and bust periods. In many cases, drops in industrial production lead to increased unemployment, while inflation lags behind other indicators. By carefully monitoring the GDP, GNP, employment, and inflation, financial analysts hedge their investment options to facilitate the best possible outcome.

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Contrarian Capital’s CEO and Chief Investment Officer Jon Bauer

Founded in 1995, Contrarian Capital Management maintains a veteran portfolio management team focused on identifying and managing exceptional opportunities in distressed securities. At the helm of the firm is CEO and Chief Investment Officer Jon Bauer. With more than three decades of relevant professional experience, Mr. Bauer’s expertise spans both distressed and active securities.

Mr. Bauer earned his Bachelor of Arts with honors at Rutgers College and completed a Master of Business Administration at Harvard Business School. He began his career with the Chase Manhattan Bank N.A. as an Analyst in the Credit Audit Department, with a focus on determining which enterprises in the firm’s loan portfolio were candidates for default. Mr. Bauer subsequently served for five years as Senior Analyst in Bear Stearns’ bankruptcy group. Prior to establishing Contrarian Capital, he spent nearly a decade as the Managing Director of Oppenheimer and Company’s trading and distressed-sales business. A founding member of the Trade Claims Buyers Association, Jon Bauer has served on numerous committees in the bond, bank debt, and trade claims sectors.

Contrarian Capital: QPAM Certification Explained

A Qualified Professional Asset Manager (QPAM) is a specific type of certified advisor as articulated by the Employee Retirement Income Security Act (ERISA). The Act, legislated in 1974, allows institutions that meet certain financial requirements to take part in investment activities that would be restricted if not represented by a QPAM. Regulated institutions, including insurance companies, with at least $1 million in shareholders’ equity and no less than $85 million under management may qualify for QPAM status.

QPAMs primarily enable pension plans to transact with private placement offerings. These placements constitute the sale of equities not registered with the United States Securities and Exchange Commission. The QPAM certification allows pension plans to engage in such activities, while ERISA prohibits non-QPAM represented pension plans from doing so.

Furthermore, trustees of a pension plan may be held liable for certain regulatory obligations. Hiring a certified QPAM minimizes the trustees’ personal liability.

About Contrarian Capital: Established in 1995 by three accomplished investment specialists, Contrarian Capital Management, LLC, is a Qualified Professional Asset Manager. The founders, Jon Bauer, Janice Stanton, and Gil Tenzer, previously worked together at Oppenheimer & Co.