Cap Stack
Cap Stack is a weekly newsletter for people interested in the world of troubled companies. With our backgrounds in restructuring and distressed investing, we bring a unique perspective to the table. A perspective that will prove to be valuable as the market turns a corner.
Why Subscribe?
After years of booming markets where companies made record profits and capital was cheap and easy to access, companies and investors became soft. Access to liquidity becomes more constrained by the day and companies face a tougher economic environment. The capital structures of yesterday will prove to be unsuitable for the companies of today.
The last distressed cycle was over a decade ago. Investors are ill prepared for the next cycle having built their skillset in the world of performing companies.
The world of troubled companies offers opportunities that may only come about a handful of times in your lifetime. Troubled companies require a unique skillset — one that is honed by deeply understanding the situations companies find themselves in and how they dig themselves out.
However, this investment approach isn't for everyone; it demands a deep understanding of the financial landscape and a strong stomach for risk.
In healthy companies, buyers of undervalued securities have to rely on the market to reprice those securities. Distressed companies always have a trigger — they either find a solution to their woes and turn themselves around or find themselves handing the keys over to lenders through a bankruptcy.
The Global Financial Crisis prompted policymakers to stave off recessions through record-low interest rates and accommodating policies. But times have changed. Inflation fears have led to rapid rate hikes, causing market liquidity to evaporate and signs of distress to emerge.
The Fed has chosen to raise rates rapidly to curb inflation. The hot ball of liquidity in markets has deflated and signs of distress are beginning to show. We are going from a period of abundance to one of adversity.
The credit market has grown considerably since 2008, and even a mild recession will generate a wealth of opportunities in distressed investing.
Cap Stack is a research publication authored by restructuring experts and special situations / distressed investors, crafted to educate you on this opaque sector and spotlight the most compelling opportunities in the distressed market.
In our weekly posts, we'll provide in-depth coverage on industry-shaping cases, stressed companies, and turnaround opportunities to arm you with invaluable insights for distressed investments.
