SVP approaches investment opportunities with a global perspective. We take advantage of dynamic credit cycles across various geographies by deploying capital opportunistically in North America, Europe, and to a lesser extent Japan. For example, currently Europe is a significant investment theme given the large amount of distressed assets on the market the more modest competition. In particular, the complexity of multi-jurisdictional restructuring processes and the rapid expansion of European leveraged deals in this cycle, and the need for European banks to sell assets have created an attractive investment environment.
Experienced and Integrated Team
SVP’s investment professionals have specialized skills in key industries, geographies and assets with long and varied experiences including running proprietary trading desks at investment banks, leading investments at private equity firms and spearheading operational turnarounds. SVP has a deep infrastructure team to support its investment professionals. This team includes the legal, accounting and administrative resources and experience that is crucial to successful distressed debt investing globally. SVP believes it has created a team-oriented culture that allows it to integrate and leverage skills globally across offices.
Immediate and Differentiated Deal Flow
SVP has an active and significant position in its focus markets. This presence gives SVP’s trading and origination team timely and unique access to deal flow. In addition, SVP has dedicated senior professionals who supplement the traditional deal flow provided through distressed debt broker-dealers by proactively calling on commercial and investment banks, bankruptcy administrators, and restructuring advisors. Advisory Board members also leverage their relationships to support our origination effort.
Demonstrated Thematic Expertise
Traditional distressed investing is often reactive: investment opportunities arise based on what debt is available for sale and which companies are distressed. In contrast, SVP takes a proactive approach. We spend considerable time upfront understanding industry and company fundamentals, asset dynamics (e.g., aircraft, commercial real estate), event catalysts, and potential debt supply – a process that averages 9-12 months and continues throughout the life of an investment. The benefits of a thematic approach are numerous: we are able to react quickly, create a head start towards identifying and sourcing investments, and generate superior conclusions as a result of thorough due diligence.
SVP has significant experience in leading restructurings on ad hoc and formal creditors’ committees, not only in the US, but also in many European and Asian jurisdictions. SVP also believes that its team of in-house operating professionals is distinctive and essential to its approach. Operating professionals participate actively in the underwriting process, adding unique insights into the strategic and management challenges and opportunities of a given business and then post-investment, take a lead role in the restructuring and turnaround of the company, including involvement in the financial workout and providing additional and necessary management skills.
SVP’s private equity vehicles target middle-market distressed investments because we believe the middle market is underserved. Moreover, we believe this market is less competitive, and this lack of competition on a global basis (particularly in Europe) is more acute because of the economies of scale required to justify the infrastructure to adequately exploit the opportunity globally. In particular, European debt is dominated by the middle market. In September 2016, over 90% of S&P’s European Leveraged Loan universe was made up of facilities that are below $1.5 billion of face value.