Acquiring distressed assets allows investors to purchase assets at a discounted price with the underlying aim of making a profit upon repayment while ensuring recurring earnings, the investor’s philosophy being that the company’s situation is not in fact as distressed as the market believes and that an improvement in the issuer’s business will result in the debt being traded at par or fully reimbursed at maturity.
The distressed debt market in particular, is a win-win situation where investors with available cash flow have an opportunity to buy loans from financial institutions at a trade price below par value with the expectation of recovering par value on an improvement in market conditions. For financial institutions, it is an opportunity to rid their balance sheets of impaired assets and to raise fresh cash to cover their liquidity short fall and improve their solvency margin.
"There’s no question the opportunities are out there, as the pool of non-performing loans grows ever larger," said Arik Kislin, Principal at Linx Industries. "And there will be even more opportunities for investors to take advantage of distressed debt as the FDIC sells off the assets of banks it has seized."
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About Arik Kislin
Arik Kislin is a self-made real estate investor, developer and entrepreneur. Arik Kislin is a principal with Linx Industries, a diversified investment company which includes JetFlight International, a Private Aviation Charter and Management Company, The Gansevoort Hotel Group, and Ocean Blue Management. Mr. Kislin began investing in a financial services firm active in the distressed debt market which manages assets in excess of $2 billion. Arik Kislin is a member of the New York Friars Club. For information see www.arikkislin.net, www.linxind.com, www.arikkislinentrepreneur.com