GB Credit Partners, the investment management affiliate of Gordon Brothers Group, makes investments in secondary debt, including distressed and leveraged loans and bonds, as well as vendor debt and other securities. The secondary debt market offers consistent opportunities to generate attractive risk-adjusted returns while focusing on capital preservation.
Attractive valuations and pricing inefficiencies may occur because of noneconomic selling, such as certain investors forced to liquidate positions due to investment restrictions or a lack of distressed analytical expertise. We therefore adhere to a disciplined investment process to address these challenges and to maximize the probability of success for each investment.
Due diligence in the secondary debt investments process includes:
- Valuation (incorporating cash flows, trends, asset values, restructuring/liquidation scenarios and ascribing value to different asset classes).
- Contractual rights (claims prioritization, enforceability of rights).
- Event dynamics (legal process timing, regulatory issues, inter-creditor issues that can affect distribution among competing constituencies).
We also have access to Gordon Brothers Group and their experienced team, who offer flexibility and creativity in loan structures. They provide unparalleled expertise in quickly identifying and assessing investment opportunities, including sector-specific dynamics and key business drivers. The firm’s experience managing and monetizing assets as well as the insolvency processes provides a tremendous advantage in understanding debt investment opportunities and minimizing loss.