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London, UK M&A, Private Equity
Senior
13 years experience
  • Distressed Debt
  • Financial Modeling
  • M&A
  • Corporate Finance
  • +12
Hire Simos
Madrid, Spain Strategy, Venture Capital
Manager
6 years experience
  • Distressed Debt
  • Financial Modeling
  • Business Strategy
  • Business Development
  • +11
Hire Pablo
Houston, TX, USA Strategy, M&A
Senior
10 years experience
  • Distressed Debt
  • Financial Modeling
  • Business Strategy
  • M&A
  • +28
Hire Cheyne
Sofia, Sofia City, Bulgaria Strategy, M&A
Senior
4 years experience
  • Distressed Debt
  • Financial Modeling
  • Business Strategy
  • M&A
  • +6
Hire Angelina
Sydney NSW, Australia Strategy, M&A
Manager
6 years experience
  • Distressed Debt
  • Financial Modeling
  • Business Strategy
  • M&A
  • +6
Hire Patrick
Hamburg, Germany Strategy, M&A
Manager
14 years experience
  • Distressed Debt
  • Financial Modeling
  • Business Strategy
  • M&A
  • +6
Hire Niklas
Berlin, Germany Strategy, M&A
Associate
5 years experience
  • Distressed Debt
  • Financial Modeling
  • Business Strategy
  • M&A
  • +4
Hire Simon
Brisbane QLD, Australia M&A, Private Equity
Senior
15 years experience
  • Distressed Debt
  • M&A
  • Due Diligence
  • Negotiation
  • +11
Hire Paul

What do Distressed Debt consultants do?

Fintalents distressed debts consultants will ensure your firm’s distressed debt level is manageable by either reducing the amount of debt, dis-incentivizing default on loans, or increasing loan security to ensure business sustainability.

The world's largest network of Distressed Debt consultants

Fintalent is the invite-only community for top-tier independent M&A consultants and Strategy professionals. Our Fintalents serve clients in North America, LATAM, Europe, MENA, and APAC.

Hire global freelance M&A consultants and Strategy experts with extensive experience in over 2,900 industries. Our platform allows you to build your team of independent M&A advisors and Strategy specialists in 48 hours. Welcome to the future of Mergers & Acquisitions!

Talent with experience at
World Map

Why should you hire Distressed Debt experts with Fintalent?

Trusted Network

Every Fintalent has been vetted manually.

Ready in 48h​​​

Hire efficiently. Your M&A team is ready in 2 days or less.​​​​

Specialized Skills​

Fintalents are best-in-class - and specialized in 2,900+ industries.​

Code of Ethics​​

We guarantee highest integrity and ethical principles.​​​

Frequently asked questions

What clients usually engage your Distressed Debt Consultants?

We work with clients from all over the world. Our clients range from enterprise and corporate clients to companies that are backed by Private Equity or Venture Capital funds. Furthermore, we work directly with Family Offices, Private Equity firms, and Asset Managers. Most of our enterprise clients have dedicated Corporate Development, M&A, and Strategy divisions which are utilizing our pool of Distressed Debt talent to add on-demand and flexible resources, expertise, or staff to their in-house team.

How is Fintalent different?

Fintalent is not a staffing agency. We are a community of best-in-class Distressed Debt professionals, highly specialized within their domains. We have streamlined the process of engaging the best Distressed Debt talent and are able to provide clients with Distressed Debt professionals within 48 hours of first engaging them. We believe that our platform provides more value for Corporates, Ventures, Private Equity and Venture Capital firms, and Family Offices.

Our Hiring Process – What do ‘Community-Approach’ and ‘Invite-to-Apply’ mean?

‘Invite-to-Apply’ is the process by which we shortlist candidates for the majority of projects on our platform. Often, due to the confidential nature of our clients’ projects, we do not release projects to our whole platform but using the matching technology and expertise of our internal team we select candidates who are the best fit for our clients’ needs. This approach also ensures engagement with our community of professionals on the Fintalent platform, and is a benefit both to our clients and independent professionals, as our freelancers have direct access to the roles best suited to their skills and are more likely to take an interest in a project if they have been sought out directly. In addition, if a member of our community is unavailable for a project but knows someone whose skill set perfectly fits the brief, they are able to invite them to apply for the role, utilizing the personal networks of each talent on our platform.

Which skills and expertise do your Fintalents have?

The Fintalents are hand-picked and vetted Distressed Debt professionals, speak over 55 languages, and have professional experience in all geographical markets. Our Distressed Debt consultants’ experience ranges from 3+ years as analysts at top investment banks and Strategy consultancies, to later career C-level executives. The average working experience is 6.9 years and 80% of all Fintalents range from 3-12 years into their careers.

Our Distressed Debt consultants have experience in leading firms as well as interfacing with clients and wider corporate structures and management. What makes our Distressed Debt talent pool stand out is the fact that they have technical backgrounds in over 2,900 industries.

How does the screening and onboarding of your Distressed Debt talent work?

Fintalent.io is an invite-only platform and we believe in the power of referrals and a closed-loop community. Members of our community are able to invite a small number of professionals onto the platform. In addition, our team actively scouts for the best talent who have experience in investment banking or have worked at a global top management consultancy. All of our community-referred talent and scouted talent are subject to a rigorous screening process. As such, over the last 18 months totaling more than 750 hours of onboarding calls, of which only 40% have received an invite-link after the call.

What happens if I am not satisfied with my Distressed Debt consultant’s work?

During your initial engagement with a member of our Fintalent talent pool with no risk. If you are not satisfied with the quality of your hire for any reason then we are able to find a replacement at short notice. There is no minimum commitment per project, but generally projects last at least 5 days and can last 12+ months.

Everything you need to know about Distressed Debt

What are Distresses Debts?

The term “distressed debt” is used in mergers and acquisitions to describe a situation where the debtor or borrower is having difficulty meeting its obligations. If a borrower is not able to repay all of their debt, they may be forced into bankruptcy, which typically results in the liquidation of their assets. This process can be quite time consuming, so distressed debt has been connected with an M&A strategy. A strategic buyer might purchase assets from the distressed company at a cut rate price in order to get out from under obligations without going through bankruptcy proceedings. This is often seen as a time-consuming process that can end up costing the buyer more than it saves.

Fintalent’s distressed debt consultants describe distressed debt as any obligation to repay money with a low probability of full repayment of principal and interest. This may include accounts receivable, bonds, loans, mortgages or lease payments. The payments are typically delinquent or in default. Lenders might choose to sell the delinquent debts at significant discounts in order to get some sort of return on their investment. This can also be referred to as “distressed debt” or “bad debt”. The process of collecting bad debt is known as distressed asset recovery (DAR).

In finance, a loan that has fallen into default has become distressed debt. The lender may sell the debt to a company or individual that specializes in buying distressed debt or they may try to collect the debt themselves. The latter case is referred to as “distressed debt recovery.” If a lender sells the defaulted loan to an agency, it is usually at a large discount, with the expectation of not receiving any more of their money.

Distressed Debt Recovery: A Key M&A Strategy

Distressed debt recovery is often conducted by specialized units within investment banks, private equity firms and hedge funds. Many financial institutions have specialists on staff whose sole responsibility is distressed debt recovery. While these specialists work on behalf of the lenders, they often act independently.

Distressed debt specialists can often offer debt at discounts of up to 25%. Most buyers of distressed debt will have the opportunity to negotiate a discount on their purchase. However, they are also required to pay some sort of fee for the privilege of buying a loan with a 90+% chance of default.

It is important to note that the distressed debt recovery stage is often a side-effect of an M&A deal. A buyer may have obligations to repay loans in the amount and timeframe that they are trying to acquire. Taking on thousands or millions in additional payment obligations from outside entities would only act as an additional strain on their resources.

In order to circumvent these issues, the buyer will often buy off the original lender. They do this in order to get out from under the obligations while allowing them to take over all of the assets of the distressed debtor. The creditor is often eager to get rid of an obligation with a high probability of default or failure due to their own financial vulnerability.

Distressed Debt Recovery in Financial Management

When distressed debt is purchased, often by private equity firms, special care has to be taken in its management and handling. Purchasing portfolios of delinquent loans can be extremely profitable if managed correctly. However, the profit comes at a price. There is the significant risk of investing in a portfolio of high-risk loans that might all go into default. While these are usually bad loans, there is always the possibility that one “priceless” loan will be repaid fully and on time. If this happens, a lender could lose hundreds of thousands or even millions from their original investment.

This type of situation has become quite common in recent years as commodity prices have declined and interest rates have stayed low for much longer than expected. Many financial institutions have had to take out substantial amounts of funding in order to maintain their existing operations and meet refinancing obligations. Many lenders have been reluctant to grant further loans due to their financial exposure. This has completely saturated the loan market and forced many borrowers, especially smaller companies, to turn to alternative forms of credit.

Most borrowers turn to non-bank lending options such as private equity firms, hedge funds or venture capitalists in order to restructure or pay off their debts. Many investors have taken advantage of these distressed situations and purchased portfolios of delinquent loans at large discounts. These portfolios often include loans that are 90+ days past due and have a substantially high probability of default.

The process involves much more than simply holding onto the debt until it either pays back or goes into default. There is much work involved with managing the distressed portfolio and shuffling it around in order to maximize revenue and returns on investment.

Debt Negotiation and Debt Selling: The Distressed Debt Recovery Process

When a borrower is having trouble keeping up with his or her payments, the lender will generally begin by offering flexible repayment terms. Often this consists of extending the term of the loan or reducing the interest rate in an effort to bring down payments to more manageable levels. If these concessions are not accepted, there is a good chance that the lender will begin to negotiate for debt that has already gone into default. This process is known as “debt negotiation.” Through debt negotiation, lenders can often get a substantial discount on their loans in return for waiving certain obligations and cutting their losses.

In order to negotiate the terms of their debt, many lenders will begin by offering a “haircut.” This is where the lender takes a percentage of the loan in return for waiving some or all of its rights to future payments. The haircut amount is often negotiated at a significant discount that brings it down to something equivalent to approximately 10% or less of the principal balance. Often both sides will agree on this deal and put it into writing.

Lenders will take far more extreme measures if no compromise can be reached through debt negotiation. In this case, they may file bankruptcy proceedings in an effort to guarantee that their losses are minimized. This process is known as “debt rescheduling.

This can often be even more beneficial to a lender than negotiating a haircut. A lender may have the right to foreclose on the assets of the borrower so they can keep the property, even though they are no longer required to make payments on the loan due to bankruptcy.

For example, let’s say that a borrower has just defaulted on his $50,000 loan. The lender is entitled to certain assets and other rights obtained by filing for bankruptcy. The most common asset that is foreclosed upon in these instances is often a prime piece of real estate (e.g., commercial or residential properties). Since many loans are secured by the properties that they were used to buy, the lender may be entitled to keep the property for themselves.

After filing for bankruptcy, a borrower may be required to go through a process known as “deficiency judgment.” This is where a court-appointed representative will attempt to determine whether there is enough left in collateral assets or income in order to make up the difference between the loan and its value. Once these assets have been identified, they will often be seized or liquidated (e.g., foreclosed). The lender will then recoup their losses through these means so that they can avoid further losses in trying to collect on the original loan balance.

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Hire the best Distressed Debt specialists in 2,900+ industries

Fintalent is the invite-only community for top-tier M&A consultants and Strategy talent. Hire global Distressed Debt consultants with extensive experience in over 2,900 industries. Our platform allows you to build your team of independent Distressed Debt specialists in 48 hours. Welcome to the future of Mergers & Acquisitions!