If you are considering an investment in distressed assets, you might want to take a global perspective.
As reported in a May ‘08 article on Bloomberg.com, Asia is on its way to attracting $10 billion in funding for distressed asset investments, with a projected rise of returns, according to Paul Jurie, who heads Standard Chartered Bank’s alternative investments division.
Certain countries like India and China, real estate companies, and industries that cannot pass higher production costs onto customers are those most likely to create distressed asset investment opportunities. Hedge funds and commericial banks (Barclays, Calyon, Standard Chartered) are those investors most active in buying up distressed assets, with about $3 billion currently invested.
Jurie explains, “I am confident that 2009 will be a good year for distressed asset investments…I recommend you invest cautiously in the next six months and more aggressively thereafter.” He also added that India and China are particularly prone to rising borrowing costs, increasing fraud, unwise management decisions, and economic slowdown, all of which lead to increased opportunities for distressed asset investment.
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